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entitled 'Trade Adjustment Assistance; Changes to Funding Allocation
and Eligibility Requirements could Enhance States' Ability to Provide
Benefits and Services' which was released on May 31, 2007.
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Report to the Congressional Requestors:
United States Government Accountability Office:
GAO:
May 2007:
Trade Adjustment Assistance:
Changes to Funding Allocation and Eligibility Requirements Could
Enhance States' Ability to Provide Benefits and Services trade
Adjustment Assistance:
GAO-07-702:
GAO Highlights:
Highlights of GAO-07-702, a report to congressional requestors
Why GAO Did This Study:
The Trade Adjustment Assistance (TAA) program, administered by the
Department of Labor (Labor), is the nation’s primary program providing
income support, job training, and other benefits for manufacturing
workers who lose their jobs as a result of international trade. In
preparation for TAA reauthorization in 2007, GAO was asked to assess
several aspects of the TAA program. Specifically, we examine (1) recent
trends in Labor’s certification of petitions and workers’ participation
in training; (2) the challenges, if any, that states face in managing
TAA training funds; and (3) the extent to which workers use the TAA
wage insurance and health coverage benefits and the factors, if any,
that limit participation.
What GAO Found:
During the past 3 fiscal years, the number of petitions certified has
declined from about 1,700 in fiscal year 2004 to about 1,400 in 2006,
covering an estimated 400,000 workers. The proportion of petitions
certified has remained at about two-thirds. About 40 percent of the
petitions were denied because workers were not involved in producing an
article. While many certified workers receive training, nearly three-
quarters of the states reported that enrolling workers by the training
deadline was a challenge. Labor’s process for allocating training funds
presents significant challenges to states. Training funds allocated to
states at the beginning of the fiscal year do not accurately reflect
states’ spending the year before or the demand for training services,
in part because Labor’s policy guarantees that each state will receive
at least 85 percent of what it received the previous year. For example,
13 states spent virtually none of their fiscal year 2006 training funds
(see fig.) Not only did these 13 states receive about $41 million in
fiscal year 2007, 5 of them even received larger allocations than the
previous year. States also cited as a challenge the lack of flexibility
to use training funds to provide trade-affected workers with case
management services. Few TAA participants take advantage of the wage
insurance and health coverage benefits, and several factors limit
participation. While the number of new workers receiving the wage
insurance benefit has increased since 2004, it remains relatively low.
The major factor preventing more workers from participating is the
requirement that workers find a job within 26 weeks. The number of
workers receiving the health benefit is also relatively low, with about
6,900 workers enrolling for the first time in the advance health
coverage benefit in 2006.
Figure: States with High and Low Use of Fiscal Year 2006 Training
Funds:
[See PDF for Image]
Source: Department of Labor, (Map) Map Resources.
[End of figure]
What GAO Recommends:
Congress may wish to consider allowing a portion of TAA training funds
to be used for case management, simplifying the training enrollment
deadline, and changing eligibility requirements for wage insurance. GAO
recommends that Labor develop procedures to better allocate training
funds. Labor generally agreed with our findings and recommendations and
noted that it would re-examine how it allocates training funds. Labor
contends that the Workforce Investment Act, rather than TAA, should
finance case management. Labor did not comment on the other Matters for
Congressional Consideration.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-702].
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Sigurd Nilsen at (202)
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[End of section]
Contents:
Letter:
Results in Brief:
Background:
Certifications and Training Enrollments Have Declined over Past 3
Fiscal Years as Petition Filings Declined:
Labor's Allocation Process and Limited Flexibility Make It Difficult
for States to Manage Training Funds:
Few TAA Participants Take Advantage of Wage Insurance and Health
Coverage Benefits:
Conclusions:
Matters for Congressional Consideration:
Recommendations for Executive Action:
Agency Comments:
Appendix I: Objectives, Scope, and Methodology:
Appendix II: Administrative Costs Related to the Health Coverage
Benefit:
Appendix III: Top Industries Certified during Fiscal Years 2004 to
2006:
Appendix IV: Final Decisions Rendered by the U. S. Court of
International Trade on Appealed Cases, Fiscal Years 2005 and 2006:
2005 CIT Decisions:
2006 CIT Decisions:
Appendix V: Occupations for Which TAA Participants Most Frequently
Received Training in Fiscal Year 2006 by State:
Appendix VI: Estimated Number of Workers Certified by State during
Fiscal Years 2004 to 2006:
Appendix VII: Percentage of Fiscal Year 2006 Training Funds Expended
and Obligated by State:
Appendix VIII: Listing of Initial Allocations of Training Funds by
State for Fiscal Years 2004 to 2007:
Appendix IX: Wage Insurance Enrollments by State since 2003:
Appendix X: Cumulative TAA Participation by State in Advance Health
Coverage Tax Credit, through September 30, 2006:
Appendix XI: Comments from the Department of Labor:
Appendix XII: GAO Contacts and Staff Acknowledgments:
Related GAO Products:
Tables:
Table 1: TAA Petition Filings and Investigation Decisions, Fiscal Years
2004 to 2006:
Table 2: Training Enrollments by Type of Training by Fiscal Year:
Table 3: States Spending Hardly Any of Their Fiscal Year 2006 Training
Funds Received Comparable Amounts in Fiscal Year 2007:
Table 4: Comparison of Average Monthly Premiums:
Table 5: Locations Selected for Site Visits:
Table 6: HCTC Administrative Costs for Fiscal Years 2003 to 2006 and
Payments for Tax Years 2003 to 2006:
Table 7: Final Decisions Rendered by CIT for Fiscal Years 2005 and
2006:
Table 8: Percentage of Fiscal Year 2006 Training Funds Spent or
Obligated, by State:
Figures:
Figure 1: Categories under Which TAA Petitions Were Certified, Fiscal
Years 2004-2006:
Figure 2: Reasons Petitions Filed in Fiscal Year 2006 Were Denied:
Figure 3: Appeals of Petitions Filed during Fiscal Years 2004 to 2006:
Figure 4: Number of TAA Participants Covered under Certifications and
Enrolled in Training by Fiscal Year:
Figure 5: States' Training Cost Limits:
Figure 6: Fluctuation in Estimated Number of Trade-Affected Workers
Laid Off from Fiscal Years 2004 to 2006 in Kansas and Missouri:
Figure 7: States with High and Low Use of Fiscal Year 2006 Training
Funds:
Figure 8: Estimated Number of Trade-Affected Workers Declined More
Sharply between Fiscal Years 2004 and 2006 in States That Used
Virtually No Fiscal Year 2006 Training Funds:
Figure 9: Wage Insurance Enrollments, Calendar Years 2004 to 2006:
Figure 10: Advance Health Coverage Benefit Enrollments, Fiscal Years
2004 to 2006:
Figure 11: Advance Health Coverage Enrollment by Type, September 2006:
Abbreviations:
ATAA: Alternative Trade Adjustment Assistance:
ATAAAR: Alternative Trade Adjustment Assistance Activity Report:
CIT: Court of International Trade:
COBRA: Consolidated Omnibus Budget Reconciliation Act:
ESL: English as a second language:
HCTC: Health Coverage Tax Credit:
HVAC: heating, ventilation, and air conditioning:
IRS: Internal Revenue Service:
SIC: Standard Industrial Classification:
TAA: Trade Adjustment Assistance:
UI: unemployment insurance:
WIA: Workforce Investment Act:
United States Government Accountability Office:
Washington, DC 20548:
May 31, 2007:
The Honorable Charles B. Rangel:
Chairman:
Committee on Ways and Means:
House of Representatives:
The Honorable Adam Smith:
House of Representatives:
International trade has benefited Americans in a number of ways,
largely by making a broader range of goods and services available.
However, international trade has also contributed to layoffs in a range
of industries, including the manufacture of textiles, paper products,
and electronic equipment. Manufacturing workers face an uncertain
future as manufacturing employment has declined--more than 3 million
manufacturing jobs have been lost in this country since 2000 due to
international trade as well as other factors. Furthermore, finding a
new job may be harder for manufacturing workers who lose their job as a
result of international trade because they tend to be older and have
fewer transferable skills than other laid-off workers.
The Trade Adjustment Assistance (TAA) program, administered by the
Department of Labor (Labor), is the nation's primary program providing
income support, job training, and other benefits for manufacturing
workers who lose their jobs as a result of international trade. In
fiscal year 2006, Congress appropriated about $655 million for income
support payments and another $220 million for training for trade-
affected workers. Each year Labor initially allocates 75 percent of the
training funds, or $165 million, to states according to a formula and
holds the remaining 25 percent in reserve to distribute to states
throughout the year as the need arises due to unexpected layoffs.
States have 3 years to spend these funds--fiscal year 2006 funds must
be used by the end of fiscal year 2008. In addition, to minimize year-
to-year fluctuations in state funding, Labor uses a "hold harmless"
policy that ensures that each state's initial allocation is at least 85
percent of the initial allocation received in the previous year. To
cover administrative costs, Labor allocates to each state an additional
15 percent of its training allocation.
The process of enrolling workers in TAA begins when a petition for TAA
certification is filed with Labor on behalf of a group of laid-off
workers. Labor then reviews the petition and determines whether the
petition meets the requirements for TAA certification, including
determining whether the layoff occurred because of an increase in
imports or a shift in production to another country. Under TAA, workers
can receive up to 130 weeks of training and up to 104 weeks of income
support benefits beyond the regular 26 weeks of unemployment insurance
benefits available in most states. Following the passage of the TAA
Reform Act in 2002, workers can also receive two additional benefits--
a health coverage benefit to help workers pay for health coverage and a
wage insurance benefit, a demonstration project for older workers who
quickly become reemployed.
Our prior work on TAA[Footnote 1] has shown that most trade-affected
workers are receiving TAA services sooner than in prior years as a
result of the TAA Reform Act of 2002, but some workers may not be
enrolling in the most appropriate training, in part, because of shorter
deadlines that leave less time to assess workers' training needs. In
addition, on the basis of an in-depth review of five layoffs, we found
that many workers were unaware of the wage insurance or health coverage
benefits.[Footnote 2] In preparation for TAA reauthorization in 2007,
you asked us to provide an updated assessment of the issues encountered
by those providing TAA benefits and services to trade-affected workers.
Specifically, we examined (1) recent trends in Labor's certification of
petitions and workers' participation in training; (2) the challenges,
if any, that states face in managing TAA training funds; and (3) the
extent to which workers use the TAA wage insurance and health coverage
benefits and the factors, if any, that limit participation.
We based our work, in part, on a survey of the 46 states that received
an initial allocation of TAA training funds in federal fiscal year 2006
(October 1, 2005, to September 30, 2006).[Footnote 3] We received
responses from all 46 states. We conducted a supplemental survey of the
46 states to collect additional financial information on fiscal year
2006 training expenditures and obligations and received 46 responses.
In addition, we interviewed Labor and Internal Revenue Service (IRS)
officials and visited state and local officials in four states--
California, Massachusetts, Michigan, and North Carolina. We used
several criteria in selecting states to visit, including the number of
TAA certifications during fiscal years 2005 and 2006, the estimated
number of workers affected by layoffs during this period, the amount of
TAA funds allocated during these 2 years, the industries that were
affected, and geographic dispersion. Within each state we also visited
one to three local areas that had a diverse set of industries and
experienced either a large number of TAA certifications or dealt with
one or more very large layoffs. In addition, we analyzed Labor's TAA
petitions database, Labor's quarterly activity reports, and IRS's data
on the health coverage benefit. We performed our work between August
2006 and May 2007 in accordance with generally accepted government
auditing standards. (See app. I for more details on our objectives,
scope, and methodology.)
Results in Brief:
During the past 3 fiscal years, there has been a decline in the number
of petitions filed and certified, and with it, a decline in the number
of workers participating in training. The number of petitions certified
declined 17 percent, from about 1,700 in fiscal year 2004, to 1,400 in
fiscal year 2006, but the proportion of petitions Labor has certified
remained relatively stable. During the past 3 fiscal years, Labor
certified about two-thirds of petitions investigated and covering about
400,000 workers. Labor most commonly denied petitions because workers
were not involved in the production of articles, a basic requirement of
the TAA program. Of the 800 petitions denied in fiscal year 2006,
nearly half were denied for this reason. Most of the denied petitions
in this group were for two service industries recently affected by
offshoring to other countries--business services, particularly computer-
related services and airport-related services, such as aircraft
maintenance. Of the approximately 2,600 petitions initially denied from
fiscal years 2004 to 2006, 16 percent were appealed, and the decisions
were reversed in about one-third of these cases. Nationally, the
decline in the number of workers entering training from fiscal years
2004 to 2006 parallels a decline in the estimated number of trade-
affected workers--declining sharply between fiscal years 2004 to 2005
but leveling off in fiscal year 2006. However, slightly more states
responding to our survey reported an increase in training enrollment
during the past 3 years than reported a decrease. Occupational training
remains the most popular type of training, constituting about three-
quarters of the training enrollments. States reported in our survey
that TAA participants most frequently trained to become nurses, medical
assistants, and truck drivers. Efforts to enroll workers in training,
however, are sometimes hampered by the training enrollment deadline--
that is, the requirement that workers be enrolled in training within 8
weeks of certification or 16 weeks of layoff to qualify for extended
income support. Nearly three-quarters of the states responding to our
survey reported that enrolling workers in training by this deadline was
a challenge.
States face challenges managing their training funds because of Labor's
policies for allocating training funds and the lack of flexibility to
use these funds to provide case management services to trade-affected
workers. Labor's process for allocating training funds presents two
significant challenges to states. First, the amount states receive at
the beginning of the fiscal year does not adequately reflect states'
spending the year before or the current demand for training services in
the state, largely because Labor's hold harmless policy guarantees that
each state will receive at least 85 percent of what it received the
previous year. For example, 13 states received an initial allocation in
fiscal year 2006 of approximately $45 million and although they spent
or obligated less than 1 percent of these funds, received about $41
million at the beginning of fiscal year 2007. Moreover 5 of the 13
states received larger amounts in fiscal year 2007 than they received
in fiscal year 2006. Second, Labor distributes a significant amount of
funds to most states on the last day of the fiscal year, even to states
that have spent less than 1 percent of the current fiscal year training
allocation. For example Labor distributed about $20 million to 48
states on the last day of the fiscal year, and $5 million of these
funds went to the 13 states that had used less than 1 percent of their
initial allocation. Another challenge cited by states was the lack of
flexibility to use training funds to provide trade-affected workers
with case management services, such as counseling to help them decide
whether they need training and which training would be most
appropriate. States receive no TAA program funds for case management
and are prohibited by law from using training funds for this service,
so they must either use their limited administrative funds or seek
resources from other programs, such as those funded by the Workforce
Investment Act (WIA).
Few TAA participants take advantage of the wage insurance and health
coverage benefits, and several factors, such as a short deadline for
getting a job and the cost of buying health coverage, may limit
participation. Although the number of new workers receiving the wage
insurance benefit has increased from 1,400 in 2004, to about 3,200 in
2006, the number remains small--two-thirds of the states estimate that
5 percent or less of their TAA participants received wage insurance in
fiscal year 2006. In 2006, wage insurance benefits totaling $16.7
million were paid to workers--an amount far less than the $85 million
that the Congressional Budget Office estimated the benefit would cost
each year. Several states reported that the requirement that workers
must find a job within 26 weeks to receive the wage insurance benefit
was the major factor preventing more workers from taking advantage of
the benefit. Moreover, several states said another factor limiting
participation in wage insurance is the requirement that for a group of
workers to be certified as eligible, the petitioning workers must have
been laid off from a firm where the affected workers lacked easily
transferable skills and a significant portion of those workers were
aged 50 or over. Participation in the health coverage benefit is also
low. Approximately 6,900 workers enrolled for the first time in the
advanced health care benefit in fiscal year 2006. About half of the
participants receiving this benefit reside in four states--North
Carolina, Pennsylvania, Tennessee, and Virginia. Several states told us
the high out-of-pocket costs of the health coverage benefit may
discourage workers from using the benefit. For example, in one state we
visited, the worker's share of the premium for a family policy under
the health coverage benefit was approximately $270 per month--or about
25 percent of the monthly unemployment insurance benefit. In addition
workers may have to pay the full premium for up to 3 months before the
health coverage benefit is authorized, and these costs are not
reimbursed by the health coverage benefit. While cost is among the most
significant factors limiting participation in the health coverage
benefit, some states also reported that it can be complicated and
difficult to understand for both workers and local case managers.
To allow states greater flexibility in how they may use their TAA funds
to provide services to workers, Congress may wish to consider allowing
a portion of TAA training funds to be used for case management
services. In addition, in order to make it easier for workers to comply
with the training enrollment deadline, Congress may wish to consider
simplifying the deadline by specifying a single time period that
commences when workers are laid off or petitions are certified,
whichever is later. Furthermore, to enable more workers to take
advantage of the wage insurance benefit, Congress may wish to consider
increasing the length of time workers have to become reemployed and
eliminating the requirement that to be certified as eligible for wage
insurance, the petitioning workers must have been laid off from a firm
where the affected workers lacked easily transferable skills and a
significant portion of those workers were aged 50 or over. Moreover, we
are recommending that the Secretary of Labor develop procedures to
better allocate training funds and ensure that any reserve funds are
given to only those states that have spent or obligated a substantial
portion of the current fiscal year allocation. In its comments, Labor
generally agreed with our findings and recommendations and noted that
it would examine the process for allocating training funds to states.
Labor, however, contends that the Workforce Investment Act, rather than
TAA, should finance case management. We agree with Labor that co-
enrollment with WIA should be encouraged, but as our report points out,
WIA funds are not always available to provide this service, especially
during large layoffs. We believe that states would benefit from having
the option to use a portion of their training funds to defray the costs
of providing case management services to trade-affected workers. Labor
did not comment on the other Matters for Congressional Consideration.
Background:
Under TAA, workers enrolled in the program have access to a variety of
benefits and services, including the following:
Training. Participants may receive up to 130 weeks of training,
including 104 weeks of vocational training and 26 weeks of remedial
training, such as English as a second language or adult basic
education.
Extended income support. Participants may receive a total of 104 weeks
of extended income support beyond the 26 weeks of unemployment
insurance (UI) benefits available in most states. This includes 78
weeks of extended income support while workers are completing
vocational training and another 26 weeks if workers are completing
remedial training. To qualify for extended income support, participants
must be enrolled in training by the later of two dates: either 16 weeks
after being laid off or 8 weeks after Labor certified their petition.
However, before this deadline is reached, the worker need not be
enrolled in training or have a waiver in order to be eligible to
receive income support. The maximum level of extended income support in
a state is set at the state's maximum UI benefit level.
Job search and relocation benefits. Payments are available to help
participants search for a job in a different geographical area and to
relocate to a different area to take a job. Participants may receive up
to a maximum of $1,250 to conduct a job search. The maximum relocation
benefit includes 90 percent of the participant's relocation expenses
plus a lump sum payment of up to $1,250.
Wage insurance benefit. The wage insurance benefit, known as the
Alternative Trade Adjustment Assistance (ATAA) program, was created by
the TAA Reform Act of 2002 as a demonstration project designed for
older workers. To be certified as eligible for the wage insurance
benefit, workers must have been laid off from a firm that had a
significant portion of workers age 50 or over who lacked transferable
skills.[Footnote 4] To receive the benefit, workers must be 50 years of
age or older and find reemployment within 26 weeks of being laid off
that pays less than $50,000 and less than they previously earned.
Workers who meet these criteria are eligible to receive 50 percent of
the difference between their new and old wages up to a maximum of
$10,000 over 2 years. In order to receive the benefit, workers forgo
TAA-funded training. For the fiscal year 2008 budget request, Labor
estimated wage insurance benefits at $23 million.
Health coverage benefit. The health coverage benefit, known as the
Health Coverage Tax Credit (HCTC) and also created by the TAA Reform
Act, helps workers pay for health care insurance through a tax
credit.[Footnote 5] Workers can choose to receive the benefit in two
ways--as an advance option that covers 65 percent of their monthly
premiums, allowing them to lower the amount they have to pay out of
pocket for health coverage, or as an end-of-year tax credit that is
claimed on their income taxes. To be eligible for the health coverage
benefit, workers must either be (1) receiving extended income support
payments, or eligible for extended income support but still receiving
UI payments, or (2) receiving the wage insurance benefit. IRS
administers the health coverage tax credit program (see app. II for
details on the administrative costs of the program). Three federal
departments--Treasury, Labor, and Health and Human Services--share
responsibility for implementing the health coverage benefit for TAA-
eligible workers. There are three health plan options that are
automatically eligible:
* COBRA continuation plans. Under the Consolidated Omnibus Budget
Reconciliation Act (COBRA) of 1985, certain employers with 20 or more
employees are required to make available 18 to 36 months of continued
health care coverage for former employees and their dependents who lose
health coverage due to certain circumstances, such as when a worker is
laid off. Generally, health care insurers may charge individuals
purchasing COBRA continuation coverage no more than 102 percent of the
total premium.
* Spousal coverage. Health care insurance obtained through the employer
of a worker's spouse is also eligible, provided that the employer
contributed less than 50 percent toward the cost of coverage.
* Individual market plans. Workers may use the health coverage benefit
to cover a portion of the monthly cost of individually purchased health
coverage if the worker purchased the coverage at least 30 days prior to
being laid off.
In addition to the three options that are automatically qualified for
the health coverage benefit, the TAA Reform Act allows states to
designate other coverage alternatives--called state-qualified options.
For example, states may make arrangements with individual health
insurers, among others, to provide coverage to TAA participants under
the health coverage benefit. These state-qualified plans must, among
other requirements, provide coverage for preexisting conditions.
TAA Petition Process:
The process for enrolling trade-affected workers in the TAA program
begins when a petition for TAA assistance is filed with Labor on behalf
of a group of workers. Petitions may be filed by the employer
experiencing the layoff, a group of at least three affected workers, a
union, or the state or local workforce agency. Labor is required to
either certify or deny the petition within 40 days after receiving it.
Labor investigates whether a petition meets the requirements for TAA
certification by taking steps such as contacting company officials,
surveying a company's customers, and examining aggregate industry data.
When Labor has certified a petition, it notifies the relevant state,
which has responsibility for contacting the workers covered by the
petition, informing them of the benefits available to them, and telling
them when and where to apply for benefits.
The TAA statute lays out certain basic requirements that all certified
petitions must meet, including that a significant proportion of workers
employed by a company be laid off or threatened with layoff and that
affected workers must have been employed by a company that produces
articles.[Footnote 6] In addition to meeting these basic requirements,
a petition must demonstrate that the layoff is related to international
trade in one of several ways, including the following:
* Increased imports--imports of articles that are similar to or
directly compete with articles produced by the firm have increased, the
sales or production of the firm has decreased, and the increase in
imports has contributed importantly to the decline in sales or
production and the layoff or threatened layoff of workers.
* Shift of production--the firm has shifted production of articles to
another country and either:
- the country is party to a free trade agreement with the United States
or:
- the country is a beneficiary under the Andean Trade Preference Act,
the African Growth and Opportunity Act, or the Caribbean Basin Economic
Recovery Act or:
- there has been or is likely to be an increase in imports of articles
that are similar to or directly compete with articles produced by the
firm.
* Affected secondarily by trade--workers must meet one of two criteria:
- Upstream secondary workers--affected firm produces and supplies
component parts to another firm that has experienced TAA-certified
layoffs; parts supplied to the certified firm constituted at least 20
percent of the affected firm's production, or a loss of business with
the certified firm contributed importantly to the layoffs at the
affected firm.
- Downstream secondary workers--affected firm performs final assembly
or finishing work for another firm that has experienced TAA-certified
layoffs as a result of an increase in imports from or a shift in
production to Canada or Mexico, and a loss of business with the
certified firm contributed importantly to the layoffs at the affected
firm.
If Labor denies a petition for TAA assistance, the workers who would
have been certified under the petition have two options for challenging
this denial. They may request an administrative reconsideration of the
decision by Labor. To take this step, workers must provide reasons why
the denial is erroneous based on either a mistake or misinterpretation
of the facts or the law itself, and must mail their request to Labor
within 30 days of the announcement of the denial. Workers may also
appeal to the United States Court of International Trade for judicial
review of Labor's denial within 60 days of either the initial denial or
a denial following administrative reconsideration by Labor.
State and local workforce agencies also play key roles in the petition
certification process and help workers take advantage of the services
and benefits available in TAA. The agencies assist workers and
employers in filing petitions and will also file petitions on behalf of
workers. After a petition is certified, the agencies contact employers
to obtain a list of workers affected by the layoff and send each worker
a letter notifying him or her of potential eligibility. The agencies
may also hold orientation sessions to provide workers with detailed
information on the TAA program and services and benefits available
through the one-stop system. In addition, case managers provide
vocational assessments and counseling to help workers enroll in the
program and decide which services or benefits are most appropriate.
Local case managers also refer workers to other programs, such as the
Workforce Investment Act, for additional services.
TAA Training Funds:
Approximately $220 million is available annually for training.[Footnote
7] Each year Labor allocates 75 percent of the training funds to states
according to a formula that takes into consideration several factors,
including the average amount of training funds allocated to states,
reported accrued training expenditures, and the average number of
training participants over the previous 2˝ years. In addition, to
minimize year-to-year fluctuations in state funding, Labor uses a hold
harmless policy that ensures that each state's initial allocation is at
least 85 percent of the initial allocation received in the previous
year. In fiscal year 2006, Labor initially allocated $165 million of
training funds to 46 states. To cover administrative costs, Labor
allocates to each state an additional 15 percent of its training
allocation.
Labor holds the remaining 25 percent in reserve to distribute to states
throughout the year according to need as they experience unexpected
large layoffs. States may request these additional funds if they have
expended at least 50 percent of all available training funds received
during the fiscal year or otherwise have demonstrated need. States have
3 years to spend these funds. Thus fiscal year 2006 funds must be used
by the end of fiscal year 2008. In fiscal year 2006, Labor also
distributed a special administrative award of $250,000 to each state to
upgrade its management information systems.
Certifications and Training Enrollments Have Declined over Past 3
Fiscal Years as Petition Filings Declined:
During the past 3 fiscal years, the number of petitions certified and
the number of workers enrolled in training has declined, along with the
number of petitions filed. The proportion of petitions certified has
remained relatively stable, as Labor certified about two-thirds of
petitions investigated in each of these years. Petitions were most
commonly denied because workers were not involved in the production of
articles, a basic requirement of the TAA program. During this time, the
number of workers estimated to be covered under certifications has
declined, along with the number of workers enrolling in training.
Occupational training continues to be the largest training category,
and states reported in our survey that workers most often trained to
become nurses, medical assistants, and truck drivers. Efforts to enroll
workers in training are sometimes hampered by the "8-16" training
enrollment deadline--that is, the requirement that workers be enrolled
in training within 8 weeks of certification or 16 weeks of layoff to
qualify for extended income support.
Labor Certified Two-Thirds of Petitions Investigated, although Number
of Certifications Declined as Petitions Filed Declined:
Over the past 3 fiscal years, the number of petitions certified has
declined 17 percent, from nearly 1,700 in fiscal year 2004 to 1,400 in
fiscal year 2006 (see app. III for a list of the top industries
certified during the past 3 fiscal years). The number of petitions
filed during this time period declined at a similar rate. Labor
certified two-thirds of petitions that it investigated over the past 3
fiscal years, certifying nearly 4,700 petitions (see table 1). These
petitions covered an estimated 400,000 workers.
Table 1: TAA Petition Filings and Investigation Decisions, Fiscal Years
2004 to 2006:
Fiscal year: 2004;
Number of petitions filed: 2,992;
Number investigated[A]: 2,559;
Number certified: 1,689;
Number denied: 870;
Percentage certified: 66.
Fiscal year: 2005;
Number of petitions filed: 2,638;
Number investigated[A]: 2,358;
Number certified: 1,589;
Number denied: 769;
Percentage certified: 67.
Fiscal year: 2006;
Number of petitions filed: 2,456;
Number investigated[A]: 2,232;
Number certified: 1,407;
Number denied: 825;
Percentage certified: 63.
Fiscal year: Total past 3 years;
Number of petitions filed: 8,086;
Number investigated[A]: 7,149;
Number certified: 4,685[B];
Number denied: 2,464[C];
Percentage certified: 66.
Source: GAO analysis of Department of Labor petitions data.
[A] About 900 petitions were terminated prior to an investigation by
the Department of Labor during fiscal years 2004 to 2006, accounting
for 12 percent of petitions filed. Petitions may be terminated for
several reasons, including that a petition was recently denied for the
layoff or a company official was not available to provide necessary
information.
[B] The numbers on petitions certified include 12 petitions that were
partially certified.
[C] Labor initially denied 2,599 petitions, but 135 were reversed upon
appeal.
[End of table]
Of the approximately 4,700 petitions certified over the past 3 fiscal
years, most qualified for the TAA program because increased imports
contributed to the layoff of workers. An additional 38 percent of
certified petitions were because workers lost jobs due to a shift in
production to another country (see fig. 1).
Figure 1: Categories under Which TAA Petitions Were Certified, Fiscal
Years 2004-2006:
[See PDF for image]
Source: GAO analysis of Department of Labor data on petitions files
during fiscal years 2004 to 2006.
Note: This figure does not include 12 petitions that were partially
certified.
[End of figure]
Although petitions for secondarily affected workers constitute only 7
percent of certified petitions, the number of workers covered under
this eligibility requirement has increased somewhat, from about 7,900
workers in fiscal year 2004 to 8,800 workers in fiscal year
2006.[Footnote 8] Nearly all of the 328 petitions certified for
secondarily affected workers during the past 3 fiscal years were for
workers at firms that supplied component parts to another firm that
experienced a TAA-certified layoff, or upstream firms. Only 4 percent
of the certified petitions for secondarily affected workers were for
workers at firms that performed final assembly or finishing work for
another firm that experienced a TAA-certified layoff, or downstream
firms. To be certified for TAA under the secondarily affected criteria,
a downstream firm must be affected by trade with Canada or Mexico,
while an upstream firm has no such limitation.
Labor has generally processed petitions in a timely manner over the
past 3 fiscal years. Labor's average processing time has remained
relatively steady, taking on average 32 days to conduct an
investigation and determine whether to certify or deny the petition.
Labor met the requirement to process petitions within 40 days for 77
percent of petitions it investigated during fiscal years 2004 to 2006.
Labor most often took only an extra day to process the remaining
petitions. Labor officials said that the reason they are not always
able to meet the 40-day time frame is because they sometimes do not
receive necessary information in a timely manner from company
officials.
Petitions Were Most Often Denied because Workers Were Not Involved in
Producing an Article:
During the past 3 fiscal years, about 2,500 petitions have been denied,
and in fiscal year 2006, the most common reason for petitions being
denied was because workers were not involved in producing an article, a
basic requirement of the TAA program.[Footnote 9] Of the over 800
petitions filed in fiscal year 2006 that were denied, 359 (44 percent)
were denied for this reason (see fig. 2).
Figure 2: Reasons Petitions Filed in Fiscal Year 2006 Were Denied:
[See PDF for image]
Source: GAO analysis of Department of Labor data on petitions filed
during fiscal year 2006.
Note: Other reasons that petitions were denied were that the company
did not experience a decline in sales or production, the predominant
cause of the layoff was unrelated to imports or a shift in production
abroad, or there was no secondary impact. This figure does not include
two petitions that were missing information on reasons they were
denied.
[End of figure]
Of those petitions denied because workers did not produce articles,
most came from two industries: business services, such as computer
programming, and airport-related services, such as aircraft
maintenance. Although data are not available on the extent to which
offshoring has occurred in these industries, there are anecdotal
accounts that offshoring has caused some job losses in these
industries.
During the past 3 fiscal years, workers appealed decisions in 16
percent of the approximately 2,600 petitions that Labor initially
denied. Labor's decisions were reversed in one-third of the appeals
(see fig. 3). Labor officials told us that appeals are often reversed
because Labor receives new information, as part of the appeals process,
that justifies certifying the petition.
Figure 3: Appeals of Petitions Filed during Fiscal Years 2004 to 2006:
[See PDF for image]
Source: GAO analysis of Department of Labor petitions data and U.S.
Court of International Trade cases.
Note: Some appeals were still being processed at the time this report
was issued.
[End of figure]
Although few denied petitions are appealed to the U.S. Court of
International Trade (CIT), many of the recent appeals concern the issue
of whether workers were involved in the production of articles. In
fiscal years 2005 and 2006, Labor's original denial was reversed in 13
cases appealed to the Court, and most of these cases addressed the
issue of whether workers produced articles (see app. IV for further
details on these cases). Some of these cases concerned workers who
produced software, which Labor had regarded as a service when the
software was not contained in a physical medium, such as a disc or CD-
ROM. In 2006, Labor revised its policy, stating that software could be
considered an intangible article because it would have been considered
an article if it had been produced in a form such as a disc or CD-
ROM.[Footnote 10] Following this decision, Labor officials reported
that they were certifying a greater proportion of petitions concerning
software.
Number of Participants in Training Has Declined as Number of Workers
Estimated to Be Certified for TAA Declined:
Nationally, the decline in the number of workers entering training from
2004 to 2006 parallels the decline in the number of workers estimated
to be covered under certifications during this period (see fig. 4).
Sixteen states responding to our survey indicated that the percentage
of TAA participants enrolling in training has decreased during the past
3 fiscal years. States in our survey reported that their participation
declines were due to fewer layoffs, fewer numbers of eligible
participants, and the need for workers to go back to work, rather than
enter training. On the other hand, 20 states in our survey reported an
increase in participation. These states said the increases were due to
several large plant closures, larger percentages of workers needing
remedial training, and more employers requiring their workers have
higher skill levels.
Figure 4: Number of TAA Participants Covered under Certifications and
Enrolled in Training by Fiscal Year:
[See PDF for image]
Source: GAO analysis of Department of Labor petitions data quarterly
activity reports.
[End of figure]
Occupational training remains the largest training category for TAA
participants, with about three-fourths of TAA training participants
opting for occupational training. In our survey, states ranked nursing-
-including registered nurses, licensed practical nurses, and certified
vocational nurses--medical assisting, and truck driving as the
occupations in which TAA participants were most frequently trained (see
app. V for a listing of the most frequently trained occupations by
state). Although occupational training remains the largest training
category, its relative percentage has decreased, while the percentage
of training enrollments for remedial education has increased (see table
2).[Footnote 11]
Table 2: Training Enrollments by Type of Training by Fiscal Year:
Type of training: Occupational;
2004: Number: 42,793;
2004: Percent: 84;
2005: Number: 29,909;
2005: Percent: 79;
2006: Number: 27,101;
2006: Percent: 75.
Type of training: Remedial;
2004: Number: 7,768;
2004: Percent: 15;
2005: Number: 7,509;
2005: Percent: 20;
2006: Number: 8,239;
2006: Percent: 23.
Type of training: On-the-job;
2004: Number: 368;
2004: Percent: 1;
2005: Number: 356;
2005: Percent: 1;
2006: Number: 590;
2006: Percent: 2.
Total;
2004: Number: 50,929;
2004: Percent: 100;
2005: Number: 37,774;
2005: Percent: 100;
2006: Number: 35,930;
2006: Percent: 100.
Source: Department of Labor data.
Note: On-the-job training (OJT) is training provided by an employer in
the public or private sector to a TAA participant that has been hired
by the employer. Under the OJT contract, the employer is reimbursed for
no more than 50 percent of the participant's wage for a specified
duration.
[End of table]
During our site visits, some local officials reported that the need for
remedial training had increased, in part because more non-English-
speaking workers were being laid off. For example, officials from local
areas in two states we visited said that most workers who opted for
training enrolled in English as a second language (ESL) courses. In
response to this need, training providers in one of the local areas
designed a specific training program for dislocated garment workers
that enabled workers to take both ESL and occupational skills training
simultaneously.
Twenty-six states in our survey reported having a maximum amount they
will pay for a worker to attend training, typically from $10,000 to
$20,000 (see fig. 5). Many of these states did, however, note that
their training maximums were flexible and could be waived if justified.
In addition, 13 states in our survey reported that their training cost
limits had increased during the past 3 years, mainly due to rises in
tuition and related expenses, as well as requests for more expensive
training.
Figure 5: States' Training Cost Limits:
[See PDF for image]
Source: GAO analysis of survey responses.
[End of figure]
Efforts to enroll workers in training are sometimes hampered by the "8-
16" training enrollment deadline--that is, the requirement that workers
be enrolled in training within 8 weeks of certification or 16 weeks of
layoff to qualify for extended income support. Nearly three-quarters of
the states responding to our survey reported that enrolling workers in
training by the 8-16 deadline was a challenge. For example, one state
noted that trying to enroll participants in training by the 8-16
deadline is particularly challenging when dealing with large layoffs
because it is difficult to handle all the logistics, such as notifying
workers and setting up appointments, for a large number of workers
within the deadline. Moreover, officials in the four states we visited
also indicated that the deadline is very confusing to workers. They
told us that workers become confused about which point in time the 8
weeks or 16 weeks apply to and, as a result, are not sure when the
clock starts and stops. We previously reported that about three-fourths
of states responded that workers at least occasionally miss the
deadline and consequently lose their eligibility for extended income
support.[Footnote 12] In that report, we recommended that Labor track
the ability of workers to meet the 8-16 deadline. As of April 2007,
Labor had not yet begun gathering information on the impact of the
deadline.
Labor's Allocation Process and Limited Flexibility Make It Difficult
for States to Manage Training Funds:
States face challenges managing their training funds because of Labor's
policies for allocating training funds and the lack of flexibility to
use these funds to provide case management services to trade-affected
workers. Labor's process for allocating training funds presents two
significant challenges to states. First, the amount states receive at
the beginning of the fiscal year does not adequately reflect states'
spending the year before or the current demand for training services in
the state, largely because Labor guarantees that each state will
receive at least 85 percent of what it received the previous year. As a
result, some states receive more training funds than they can use,
while others do not receive enough. For example, in fiscal year 2006, 9
states used virtually all their funds, while 13 states used hardly any.
On average, about 62 percent of the training funds states received in
fiscal year 2006 were spent or obligated. Second, Labor distributes a
significant amount of funds to most states on the last day of the
fiscal year, even to states that have spent less than 1 percent of the
current fiscal year's training allocation. States also report being
challenged by the lack of flexibility to use training funds to provide
trade-affected workers with case management services, such as
counseling to help them decide whether they need training and what type
of training would be most appropriate. States receive no TAA program
funds for case management, and the law does not allow them to use
training funds for this service, so they must either use their limited
administrative funds or seek resources from other programs, such as
those funded by the Workforce Investment Act.
Labor's Policies for Allocating Training Funds Present Challenges to
States in Managing Their Funds:
Labor's process for allocating training funds does not adequately
recognize the episodic nature of layoffs or the extent to which states
have used their previous year's allocations. Labor allocates 75 percent
of TAA training funds based upon a formula that takes into account
expenditures and participation over the previous 2 ˝ years. However,
the year-to-year fluctuation in layoffs within a state may result in
states receiving more or less funds than they may actually need. For
example, the estimated number of trade-affected workers being laid off
declined dramatically in Kansas from fiscal year 2004 to 2005 and
increased somewhat in 2006. Overall the estimated number of trade-
affected workers in Kansas laid off in fiscal year 2006 represented
about an 80 percent decrease from the estimated number in 2004. On the
other hand, Missouri experienced an 80 percent increase in the number
of trade-affected workers being laid off between fiscal years 2004 and
2006 (see fig. 6.) (See app. VI for the number of estimated workers
certified by state during the past 3 fiscal years.) Kansas used hardly
any of its fiscal year 2006 training fund allocation, while Missouri
used virtually all of its. However, both states received about 15
percent less in fiscal year 2007 than they received in 2006.
Figure 6: Fluctuation in Estimated Number of Trade-Affected Workers
Laid Off from Fiscal Years 2004 to 2006 in Kansas and Missouri:
[See PDF for image]
Source: GAO analysis of Department of Labor petitions data.
[End of figure]
While the 46 states responding to our survey reported using (spending
or obligating), on average, about 62 percent of their fiscal year 2006
training funds during the fiscal year, the percentage of funds states
expended and obligated varied widely. Thirteen of the states reported
using less than 1 percent of their fiscal year 2006 funds for training,
while 9 states reported using more than 95 percent of their fiscal year
2006 training funds (see fig. 7). The amount individual states reported
using ranged from 0 percent in several states to about 230 percent in 1
state. (See. app. VII for a listing of the percentage of fiscal year
2006 funds spent or obligated by state).
Figure 7: States with High and Low Use of Fiscal Year 2006 Training
Funds:
[See PDF for image]
Source: Department of Labor, (Map) Map Resources.
[End of figure]
The estimated number of workers covered by certifications decreased by
more than 40 percent between fiscal years 2004 and 2006 in the 13
states that used hardly any of their fiscal year 2006 training funds.
On the other hand, the estimated number of workers only declined
slightly during this period for the states using virtually all their
fiscal year 2006 training funds (see fig. 8). Most of the states that
used little of their fiscal year 2006 funds said that they were still
using training funds from the previous fiscal year. Some of these
states noted that they had experienced fewer TAA petitions and had
fewer workers being laid off due to international trade.
Figure 8: Estimated Number of Trade-Affected Workers Declined More
Sharply between Fiscal Years 2004 and 2006 in States That Used
Virtually No Fiscal Year 2006 Training Funds:
[See PDF for image]
Source: GAO analysis of survey responses and Department of Labor
petitions data.
[End of figure]
A particular problem with Labor's allocation process is the hold
harmless policy, which guarantees that each state receives no less than
85 percent of what it received in the previous year. While this policy
is intended to minimize significant fluctuations in state funding from
prior years, it awards states comparable training funds without
recognition of the previous year's expenditures or obligations. For
example, the 13 states that used less than 1 percent of the fiscal year
2006 funds received nearly $41 million in fiscal year 2007--an amount
slightly less than they received in fiscal year 2006. Moreover, 5 of
the 13 states received a larger allocation in fiscal year 2007 than
they received in 2006 (see table 3). Labor officials acknowledged that
the formula for allocating initial training funds had been in place for
a few years and that it may be time to evaluate whether the formula---
including the factors used, the 75 percent initial distribution
percentage, and the hold harmless policy--ensures that training funds
are being appropriately distributed to the states. (See app. VIII for a
listing by state of Labor's initial allocation of training funds for
fiscal years 2004 to 2007.)
Table 3: States Spending Hardly Any of Their Fiscal Year 2006 Training
Funds Received Comparable Amounts in Fiscal Year 2007:
State: Arizona;
2006 initial allocation: $2,440,988;
2007 initial allocation: $2,074,840.
State: Florida;
2006 initial allocation: 3,350,544;
2007 initial allocation: 2,847,962.
State: Idaho;
2006 initial allocation: 2,390,380;
2007 initial allocation: 2,031,823.
State: Kansas;
2006 initial allocation: 2,775,736;
2007 initial allocation: 2,359,376.
State: Kentucky;
2006 initial allocation: 3,705,162;
2007 initial allocation: 3,830,061.
State: Minnesota;
2006 initial allocation: 4,005,739;
2007 initial allocation: 3,404,879.
State: Montana;
2006 initial allocation: 1,109,440;
2007 initial allocation: 943,024.
State: New Mexico;
2006 initial allocation: 377,871;
2007 initial allocation: 396,303.
State: New York;
2006 initial allocation: 2,642,798;
2007 initial allocation: 2,850,870.
State: Oklahoma;
2006 initial allocation: 1,523,960;
2007 initial allocation: 1,577,252.
State: South Carolina;
2006 initial allocation: 4,366,585;
2007 initial allocation: 4,499,254.
State: Utah;
2006 initial allocation: 1,814,367;
2007 initial allocation: 1,542,212.
State: Washington;
2006 initial allocation: 14,357,300;
2007 initial allocation: 12,203,705.
Total;
2006 initial allocation: $44,860,870;
2007 initial allocation: $40,561,561.
Source: Department of Labor.
[End of table]
Labor Distributes Additional Training Funds at the End of the Fiscal
Year, Even to States Not Using Initial Allocation:
Labor distributes a significant amount of funds to most states on the
last day of the fiscal year, regardless of whether states need these
additional funds. Labor holds 25 percent of TAA training funds in
reserve to distribute on an as-needed basis to accommodate large or
unexpected layoffs. States may request these additional funds if they
have expended at least 50 percent of all available training funds
received during the fiscal year or otherwise have demonstrated need.
During fiscal year 2006, Labor distributed about $22 million to 13
states that requested additional funds to deal with unexpected demands.
This left about $20 million to be distributed at the end of the year.
Any funds Labor does not distribute by the end of the year expire and
are not available for any other use. Labor distributed end-of-year
funds to 48 states, including about $5 million to states that had spent
or obligated less than 1 percent of their initial fiscal year 2006
allocation.[Footnote 13]
Labor does not require states to have expended 50 percent of available
training funds in order to receive training funds during the end-of-
year distribution. Labor distributes these funds to each state based
upon a calculation that takes into account the amount of training funds
each state received from its initial allocation plus any additional
amount it received during the year.[Footnote 14] According to Labor
officials, all states will receive an end-of-year allocation unless a
state specifically informs Labor it does not want any additional funds
or if it had not received any funds at all during the year. Five
states--Michigan, North Carolina, Pennsylvania, Texas, and Washington-
-received over $1 million on the last day of the fiscal year. We
visited Michigan and North Carolina, and officials in both states said
that receiving funds on the last day of the fiscal year made it
difficult to budget for training, especially when they did not know how
much they would receive.
Waiting until the last day of the fiscal year to distribute training
funds to states does not reflect good planning or management of program
funds. Labor officials agreed that the distribution of reserve training
funds could be improved so that more funds are disbursed throughout the
year rather than on the last day. Officials also acknowledged that
states that have not spent or obligated any of their initial allocation
probably should not receive additional training funds at the end of the
year.
Limited Flexibility in Use of Training Funds Hinders Case Management
Services:
States also cited the lack of flexibility to use training funds to
provide trade-affected workers with case management services as a
challenge. Difficulty funding case management services for trade-
affected workers was a concern among officials in the states we
visited. For example, state officials in one state said providing
proper assessment, career counseling, and other case management
services was a real challenge and noted that additional funds from
other sources are limited. States do not receive TAA program funds for
case management and, by law, cannot use training funds for this
service. As a result, states must either use their limited TAA
administrative funds or use funds from other programs to pay for case
management, but there are limitations with these funding sources.
According to Labor officials, states are encouraged to co-enroll
participants in WIA, and in Labor's view states have sufficient WIA
funds to pay for case management for TAA participants. About three-
fourths of the states reported in our survey that they were able to
utilize WIA funds to help pay for case management services. Yet nearly
half of the states also reported that coordination with WIA was a
challenge. For example, WIA funding may not always be available for TAA
workers, especially during a large layoff. Furthermore, local officials
in a state we visited said that while 85 percent of TAA participants do
co-enroll in WIA, a large layoff can strain funding and makes it
difficult for WIA to completely fund case management for trade-affected
workers.
States also reported limitations to using administrative funds to
provide case management. More than half of the states responding to our
survey reported the shortage of administrative funds as a challenge.
One state noted that its administrative funds are usually exhausted by
the end of the first quarter due to the amount of case management that
is required for the program. A local official in one state we visited
said that it uses Wagner-Peyser funds to pay for case management
because not enough TAA administrative funds are received and TAA
training funds cannot be used. As a result, only one case manager could
be funded, and this one person had to cover three counties and serve
approximately 1,000 workers. Moreover, officials in some of the states
we visited cautioned that administrative funds should not be used for
case management because case management is a program activity--any
increase in the administrative limit to pay for this service could lead
to the misconception that the program has too much overhead. These
state officials noted that having the flexibility to use TAA training
funds for case management would alleviate this concern.
Few TAA Participants Take Advantage of Wage Insurance and Health
Coverage Benefits:
Few TAA participants take advantage of the wage insurance and health
coverage benefits, and several factors, such as a short deadline for
getting a job and the cost of buying health coverage, may limit
participation. Although the number of workers entering the wage
insurance program has increased from 2004 to 2006, most states in our
survey estimated that 5 percent or less of their TAA participants
received the benefit in fiscal year 2006. In 2006, wage insurance
benefits totaling $16.7 million were paid to workers--an amount far
less than the $85 million that the Congressional Budget Office
estimated the benefit would cost each year. In our site visits, states
reported that the requirement that workers must find a job within 26
weeks to receive the wage insurance benefit was the major factor
preventing more workers from taking advantage of the benefit. An
additional factor that may limit participation in wage insurance by
some older workers is the requirement that for a group of workers to be
certified as eligible, the petitioning workers must have been laid off
from a firm where the affected workers lacked easily transferable
skills and a significant portion of those workers were aged 50 or over.
The number of workers receiving the advance health coverage benefit has
increased somewhat since 2004, but is still relatively low. State
officials told us the high out-of-pocket costs of the health coverage
benefit may discourage workers from using the benefit. While cost is
one of the most significant factors limiting participation in the
health coverage benefit, some states also reported that the health
coverage tax credit program can be complicated and difficult to
understand for both workers and local case managers.
Deadline to Find Employment and Other Requirements Limit Participation
in the Wage Insurance Benefit:
Few TAA participants take advantage of the wage insurance benefit.
According to Labor officials, in calendar year 2006, 6,316 workers
received the wage insurance benefit. Labor officials also stated that
the universe of workers eligible for wage insurance cannot be estimated
because data are not available on the number of workers certified for
TAA who are 50 years old or older and meet the other eligibility
requirements. However, two-thirds of the states we surveyed reported
that 5 percent or less of TAA participants received wage insurance in
fiscal year 2006.[Footnote 15] We previously reported in a case study
that less than 20 percent of the workers potentially eligible for the
wage insurance benefit received it.[Footnote 16]
Although participation is low, participation has increased since the
benefit was implemented in August 2003. The number of workers enrolling
in the program increased from about 1,400 in 2004 to about 3,200 in
2006 (see fig. 9). The total payments workers received also increased
from about $4.3 million in 2004 to about $16.7 million in 2006. Despite
these increases, the total yearly benefits remain far lower than the
2002 Congressional Budget Office estimate of $85 million per year. (See
app. IX for further details on wage insurance enrollments by state
since 2003.)
Figure 9: Wage Insurance Enrollments, Calendar Years 2004 to 2006:
[See PDF for image]
Source: Department of Labor data.
[End of figure]
Although officials in the states we visited believe the wage insurance
benefit is beneficial to older workers close to retirement, two key
factors limit participation. Officials in states we visited said that
one of the greatest obstacles to participation was the requirement for
workers to find a new job within 26 weeks after being laid off. For
example, according to officials in one state, 80 percent of
participants who were seeking wage insurance but were unable to obtain
it failed because they could not find a job within the 26-week period.
The challenges of finding a job within this time frame may be
compounded by the fact that workers may actually have less than 26
weeks to secure a job if they are laid off prior to becoming certified
for TAA. For example, a local case worker in one state we visited said
that the 26 weeks had passed completely before a worker was certified
for the benefit. In addition, in order for a worker to receive the wage
insurance benefit, the workers must forgo training and extended
unemployment insurance benefits.
Another factor that may limit participation by some older workers is
the requirement that a worker's firm must be certified for the wage
insurance benefit before any of its workers are eligible. Under the TAA
Reform Act, for a group of workers to be certified, the petitioning
workers must have been laid off from a firm where the affected workers
lacked easily transferable skills and a significant portion of those
workers were aged 50 or over. Labor interprets a "significant portion"
as the lesser of 5 percent of the affected workforce or 50 workers at a
firm with 50 or more workers, or at least 3 workers in a firm with
fewer than 50 affected workers. Labor investigates each petition to see
if the firm meets the requirements, and in fiscal year 2006, nearly 90
percent of TAA-certified petitions were also certified for the wage
insurance benefit. Labor officials said that eliminating this step of
the TAA certification process--that is, allowing any TAA-certified
workers who meet the individual eligibility criteria for the wage
insurance benefit to participate--would decrease the agency's
investigation workload somewhat and may increase participation in the
wage insurance benefit.
Participation in the Health Coverage Benefit Remains Low:
Participation levels remain low for the health coverage benefit.
Although the number of TAA participants enrolling for the first time in
the advance health coverage benefit--whereby participants receive a
monthly tax credit that covers 65 percent of their premiums--has
increased since 2004, only about 6,900 received the advance health
benefit in fiscal year 2006. TAA participants may also elect to receive
an end-of-year tax credit, but the number of TAA participants selecting
this option is also low and has been decreasing over time. Once the
advance payment systems were established, workers have been choosing
the advance benefit more often than the end-of-year credit to avoid
paying the full cost of the health coverage out of pocket each month.
We estimate that for tax year 2005, approximately 5,700 TAA
participants received end-of-year tax credits. However, some workers
receive both the advance and end-of-year tax credit--participants may
claim the end-of-year tax credit to recover some of the out-of-pocket
expenses they incurred while waiting for their first advance payment.
IRS reported that of those TAA participants receiving an end-of-year
credit in tax year 2005, a total of 3,300 participants received both
the advance and end-of-year credits.
New enrollments in the advance credit option have increased over the
past 2 fiscal years from about 5,600 to about 6,900 enrollments (see
fig. 10). As of September 2006, approximately 7 percent of the workers
that were eligible for the extended income support, a basic requirement
for the health coverage benefit, were receiving the advance credit.
However, some of the workers that were eligible for extended income
support may not meet other eligibility requirements for the health
coverage benefit, such as having a qualified health plan. Since
inception of the advance benefit, about 22,000 TAA participants have
received the credit. (See app. X for advance health coverage enrollment
by state since the benefit became available.)
Figure 10: Advance Health Coverage Benefit Enrollments, Fiscal Years
2004 to 2006:
[See PDF for image]
Source: GAO analysis of IRS data.
Notes: IRS data on new advance credit enrollments are unavailable prior
to January 2004.
[End of figure]
About half of all individuals enrolled in the advance health coverage
tax credit since inception resided in four states--North Carolina,
Pennsylvania, Tennessee, and Virginia. North Carolina alone had nearly
a quarter of the TAA participants enrolled for the advance credit
nationwide. State officials attributed this to two factors. First,
North Carolina was among the first states in the nation to implement
the advance health coverage tax credit and has the highest potentially
eligible population. Second, the state contracts with a not-for-profit
call center that informs workers about all the TAA benefits available,
including the health coverage benefit. The call center walks TAA
participants through the complex health coverage tax credit enrollment
process.
Workers may choose among several options of health coverage, including
COBRA and state-qualified plans. In September 2006, over 75 percent of
TAA participants who received advance health benefits selected COBRA
health coverage. Although COBRA is expensive, according to state
officials, this is the most attractive option because it allows workers
to maintain the health coverage they had prior to being laid off and
avoid searching for new coverage that meets the specific eligibility
criteria for the health coverage benefit (see fig. 11). However, if a
firm discontinues its employee health coverage, workers potentially
eligible for the health coverage benefit would not likely have access
to COBRA.
Figure 11: Advance Health Coverage Enrollment by Type, September 2006:
[See PDF for image]
Source: GAO analysis of IRS data.
[End of figure]
Although most states offered a state-qualified health plan, less than
25 percent of advance health benefit participants selected state-
qualified health coverage. Only a small percentage of advance benefit
participants purchased individual plan coverage, which requires workers
to be enrolled in an individual plan 30 days prior to separation. IRS
reported that it is difficult for workers to anticipate the need to
purchase this coverage in time to meet the 30-day requirement.
Cost Is a Key Factor Limiting Participation in the Health Coverage
Benefit:
The high cost of the health coverage benefit to participants is the
greatest barrier to higher participation. State officials said that
many laid-off workers cannot afford to pay 35 percent of their health
care premiums while their primary income is unemployment insurance
benefits. IRS officials reported that the workers' 35 percent share as
among the primary barriers to participation in the benefit. For
example, in the four states we visited, the average monthly premium for
COBRA policies covering two or more individuals was about $800. The
workers' out-of-pocket cost for COBRA coverage in these states would be
nearly one-fourth of their monthly UI payment (see table 4).
Table 4: Comparison of Average Monthly Premiums:
State: California;
Average monthly UI payment: $1,176;
Average monthly COBRA premium for two or more: $777;
Workers' 35 percent share of monthly premium: $272;
Percentage of monthly UI payment: 23.
State: Massachusetts;
Average monthly UI payment: 1,465;
Average monthly COBRA premium for two or more: 895;
Workers' 35 percent share of monthly premium: 313;
Percentage of monthly UI payment: 21.
State: Michigan;
Average monthly UI payment: 1,161;
Average monthly COBRA premium for two or more: 737;
Workers' 35 percent share of monthly premium: 258;
Percentage of monthly UI payment: 22.
State: North Carolina;
Average monthly UI payment: 1,074;
Average monthly COBRA premium for two or more: 770;
Workers' 35 percent share of monthly premium: 270;
Percentage of monthly UI payment: 25.
Average;
Average monthly UI payment: $1,219;
Average monthly COBRA premium for two or more: $795;
Workers' 35 percent share of monthly premium: $278;
Percentage of monthly UI payment: 23.
Source: GAO analysis of UI data from states and average COBRA premiums
from IRS.
[End of table]
State-qualified plans are similarly expensive and are often more
expensive than COBRA coverage. Currently, 43 states have such plans,
which, among other requirements, must provide for preexisting
conditions. For example, in one state we visited, the premium for the
state-qualified plan for a family was about $940 per month, while the
average COBRA premium was about $740 per month. The worker's share of
the state-qualified premium was about $330---or about 30 percent of the
UI benefit--compared to about $260 for COBRA coverage.
In addition, there is currently a period of up to about 3 months where
workers must cover the full cost of their health premiums before
beginning to receive the advance credit, and this may be a further
barrier to their participation. In 2004, we reported that it typically
took from 4 to 6 months for workers to become eligible for and receive
the first advance payment[Footnote 17]. The gap in time is created by
three different periods in the health coverage benefit eligibility and
enrollment process. The first gap occurs between the date a worker is
laid off and when the worker is TAA-certified and therefore eligible
for the health coverage benefit. The average time Labor takes to
process a TAA petition is 32 days. According to IRS, a gap of
approximately 55 days also exists from the time IRS mails a health
coverage benefit program kit to a worker and the time a worker's
registration for the benefit is received by the agency. A worker is not
eligible for an end-of-year tax credit during these two time periods.
The third gap occurs from the time a worker applies for the advance
health credit until the time enrollment is completed. According to IRS,
this takes about 6 days. Participants may claim an end-of-year credit
or receive benefits from the state for this time period.[Footnote 18]
Although the overall gap has been reduced, local case managers in our
site visits said that many workers cannot afford to hold on to their
health coverage long enough to take advantage of the benefit. In these
cases, workers may no longer be eligible for the health coverage
benefit because workers must maintain "continuous" coverage and have a
health plan in place to receive the tax cred[Footnote 19]it. IRS
officials reported that inability to pay the out-of-pocket costs
between layoff and application for the advance credit is one of the
reasons workers lose eligibility and may be denied the benefit. Workers
may also obtain the end-of-year credit, but to do so, they pay the full
cost of health coverage throughout the year and then apply for the
credit when they file their annual tax return with IRS.
While cost is one of the most significant factors limiting
participation in the health coverage benefit, some states also reported
that the health coverage tax credit program can be complicated and
difficult to understand for both workers and local case managers. In
our survey, nearly two-thirds of the states reported that limited IRS
guidance on the benefit was still a challenge. Furthermore, during our
site visits, some state and local officials said that they are not
experts on the health coverage benefit and do not know enough details
of the benefit to get information out to workers and to assist them
with the enrollment process. In some local areas, case workers we
interviewed said that they provide minimal information about the
benefit and primarily refer workers to pamphlets or the IRS call center
for details. In addition to providing pamphlets on the health coverage
benefit to state workforce agencies, IRS also provides states with
information about the health coverage benefit for state rapid response
teams and employers, as well as a registration to-do list for workers.
We previously reported on the complexity of the health coverage
benefit, noting that the process for workers to become eligible and
enroll for the benefit was fragmented and difficult to
navigate.[Footnote 20] In that report, we recommended to several
agencies, including Labor and IRS, that a centralized resource be made
available at the time individuals must make decisions about purchasing
qualifying health coverage and meeting other eligibility requirements.
In February 2007, IRS began distributing to all workers covered by a
petition a more simplified program kit for the health coverage benefit.
This kit contains a self-administered questionnaire that helps workers
determine whether they may be eligible for the benefit, based on their
responses to the questions, and what steps they must take to enroll. It
also provides a list of frequently asked questions, a glossary of terms
related to the benefit, and contact information for several agencies
involved in implementing the benefit.
Conclusions:
TAA provides a range of benefits and services to manufacturing workers
who lose their jobs due to international trade. Some workers may need
federally funded assistance to help them transition to new jobs; others
may not want or need it. Use of certain benefits--the wage insurance
and health coverage benefits--has remained relatively low since they
became available following passage of the 2002 TAA Reform Act. Benefits
paid under the wage insurance demonstration continue to fall far short
of predictions. Our findings suggest that despite the potential benefit
that the wage insurance may bring in helping older workers quickly re-
enter the labor market, several eligibility criteria limit its use. For
older workers who lack transferable skills--the target population for
this benefit--the 26 weeks that they are allowed to find a new job may
not be long enough. In addition, the requirement that a significant
portion of a firm's affected workers must be age 50 or over in order
for a group of workers to be certified means that an individual worker
who is over 50 may not be eligible to apply for wage insurance benefits
while peers in other firms where more workers were over 50 would have
access to such benefits. Continuing the current eligibility
requirements for the wage insurance demonstration program may mean that
participation will remain low and workers who could benefit from this
assistance will not be able to take advantage of it. Our findings also
show that participation in the health coverage benefit remains low,
largely because of the high cost of monthly premiums. While
participation is low, some states appear more successful than others in
enrolling more workers. This may be due, in part, to their increased
efforts to make workers aware of the benefit and help them understand
how to access it.
Workers often need help making decisions about training--what type of
training to take or whether to enroll in training at all. State
officials tell us that workers can be confused about when they must
enroll in training to qualify for extended income support and health
coverage benefits because of the complex training enrollment deadline
that requires them to be enrolled within 8 weeks of certification or 16
weeks of layoff. Furthermore, workers may not be getting the assistance
they need to make training decisions because states lack the needed
funding--or funding flexibility--to provide it. Currently, states must
use their limited TAA administrative funds to provide this case
management, or seek assistance from other programs, such as WIA or
Wagner-Peyser. When other programs are tapped to provide these
services, trade-affected workers must compete with all other eligible
participants to gain access to the services they need. Moreover, this
competition is heightened during economic downturns or large layoffs--
precisely when TAA participants are most likely to need services.
Nationwide, the number of workers who are enrolling in training has
declined, as has the number of petitions and workers certified. But
this is not a uniform picture across the country, as layoffs follow an
uneven trajectory. However, Labor's approach to distributing training
funds fails to take into account the episodic nature of layoffs, using
historic data to allocate training funds each year and guaranteeing
that no state will receive less than 85 percent of what it received the
year before. Given the uneven nature of layoffs, this approach raises
concerns about whether the states most in need of funds are receiving
them. Our findings suggest that Labor's allocation of training funds
leaves some states with more money than they need, and others with too
little. In fact, states that appear not to be in need of additional
funding at all because they did not spend any of their fiscal year 2006
funds received nearly as much or more in their fiscal year 2007
allocation. Moreover, Labor distributed millions of dollars of reserved
training funds at the end of fiscal year 2006 to nearly all states,
including those that had not spent any of their 2006 training funds
during the year.
Matters for Congressional Consideration:
We suggest that Congress consider taking the following actions:
* To allow states greater flexibility in how they may use their TAA
funds to provide services to workers, Congress may wish to consider
allowing a portion of TAA training funds to be used for case management
services.
* In addition, in order to make it easier for workers to comply with
the training enrollment deadline, Congress may wish to consider
simplifying the deadline by specifying a single time period that
commences when workers are laid off or petitions are certified,
whichever is later.
* Furthermore, if Congress decides to extend the wage insurance benefit
demonstration program, Congress may wish to consider easing some of the
constraints on accessing this benefit to enable more workers to take
advantage of it, including:
- increasing the length of time workers are allowed to become
reemployed,
- eliminating the requirement that a firm's affected workers must lack
transferable skills in order for a group of workers to be certified as
eligible for wage insurance, and:
- eliminating the requirement that a significant number of a firm's
workers be age 50 or over in order for a group of workers to be
certified as eligible for wage insurance.
Recommendations for Executive Action:
In order to better ensure that TAA training funds are allocated to
states that have demonstrated a need for training funds and have used a
significant portion of the funds they have already been allocated, we
recommend that the Secretary of Labor take the following actions:
* change the process for initially distributing training funds,
including the initial allocation percentage and the hold harmless
policy, and:
* develop procedures to better allocate the reserve funds throughout
the fiscal year to enable states to carefully manage their training
resources, ensuring that these reserve funds are distributed only to
those who have spent or obligated a significant portion of the current
fiscal year allocation.
Agency Comments:
We provided a draft of this report to Labor and IRS for review and
comment. IRS only provided technical comments that we incorporated in
the report where appropriate. Labor generally agreed with our findings
and recommendations and noted that it was pleased that we addressed
some of the issues surrounding the TAA allocation formula. Labor noted
that while it believes the adoption of a formula-based methodology for
distributing TAA training funds has been a success, it agrees that the
formula, and, in particular, the hold harmless provision, should be
reviewed to ensure that funds are allocated efficiently to meet
training needs. In addition, Labor agreed to examine the process for
distributing reserve funds throughout the year instead of waiting for
states to request these funds. Labor, however, noted that it did not
think that the 15 percent allocation for TAA administration should be
increased to finance case management for trade-affected workers, saying
that these services should be funded through co-enrollment in WIA. Our
report does not recommend this, but suggests that Congress consider
allowing states the flexibility to use some portion of TAA training
funds to provide this service. We agree with Labor that co-enrollment
with WIA should be encouraged, but as our report points out, WIA funds
are not always available to provide this service, especially during
large layoffs. We continue to believe that when WIA funds are not
available to fund case management, states would benefit from having the
option to use a portion of their training funds to defray the costs of
providing case management services to trade-affected workers. Labor did
not comment on the other Matters for Congressional Consideration.
Labor's entire comments are reproduced in appendix XI.
We will send copies of this report to the Secretary of Labor, the
Commissioner of Internal Revenue, relevant congressional committees,
and other interested parties and will make copies available to others
upon request. In addition, the report will be available at no charge on
GAO's Web site at http://www.gao.gov.
A list of related GAO products is included at the end of this report.
If you or your staff have any questions about this report, please
contact me at (202) 512-7215 or at nilsens@gao.gov. Contact points for
our Offices of Congressional Relations and Public Affairs may be found
on the last page of this report. Other contacts and staff
acknowledgments are listed in appendix XII.
Signed by:
Sigurd R. Nilsen:
Director, Education, Workforce, and Income Security Issues:
[End of section]
Appendix I: Objectives, Scope, and Methodology:
Our objectives were to determine (1) trends in Labor's certification of
petitions and workers' participation in training during the past 3
fiscal years; (2) what challenges, if any, states face in managing
Trade Adjustment Assistance (TAA) training funds; and (3) the extent to
which workers use the TAA wage insurance and health coverage benefits
and the factors, if any, that limit participation. To address these
questions, we conducted a Web-based survey of all 46 states that
received an initial allocation of TAA training funds in federal fiscal
year 2006 (October 1, 2005, to September 30, 2006). We also conducted a
supplementary survey to collect additional financial information on
fiscal year 2006 training expenditures and obligations. In addition, we
interviewed Labor and IRS officials and visited state and local
officials in four states--California, Massachusetts, Michigan, and
North Carolina. We also reviewed data from the Department of Labor and
the Internal Revenue Service (IRS). We performed our work between
August 2006 and May 2007 in accordance with generally accepted
government auditing standards.
Web-Based Survey:
To gather information on the states' program and benefit participation
and perceived challenges, we conducted a Web-based survey of states
that received an initial TAA funding allocation for fiscal year 2006.
The Web-based survey was conducted using a self-administered electronic
questionnaire posted on the Web. We received completed surveys from all
46 states. The practical difficulties of conducting any survey may
introduce errors, commonly referred to as nonsampling errors. For
example, difficulties in how a particular question is interpreted, in
the sources of information that are available to respondents, or in how
the data are entered into a database or were analyzed can introduce
unwanted variability into a survey design. We took steps in the
development of the questionnaires, the data collection, and the data
analysis to minimize these nonsampling errors. For example, social
science survey specialists designed the initial questionnaire in
collaboration with GAO staff with subject matter expertise. The draft
questionnaire was pretested with 3 states to ensure that the questions
were relevant, clearly stated, and easy to comprehend. When the data
were analyzed, an independent analyst checked all answers using a
statistical program. Since the survey was a Web-based survey,
respondents entered their answers directly into the electronic
questionnaire. This eliminated the need to have the data keyed into a
database, thus removing an additional source of error.
Supplementary Survey:
To gather information on states' fiscal year 2006 expenditures and
obligations, we conducted a follow-up e-mail survey of the 46 states
that received an initial TAA funding allocation. Prior to administering
the survey, we pretested the content and format of the questionnaires
with 3 states to determine whether (1) the surveys questions were
clear, (2) the terms used were precise, and (3) respondents were able
to provide the information we were seeking. We made changes to the
content and format of the final questionnaire based on pretest results.
The survey was sent out via e-mail to the TAA coordinators of the 46
states that received an initial fiscal year 2006 allocation. We
received completed surveys from all 46 states.
Site Visits:
We selected 4 states for site visits, using several criteria to select
the states and local areas. First we considered such factors as:
* the number of TAA certifications in the state in fiscal years 2005
and 2006,
* the estimated number of workers affected by TAA-certified layoffs,
* the initial allocations of TAA training funds,
* the industries in which TAA petitions were certified, and:
* geographic dispersion.
California, Michigan, and North Carolina were all among the top 10
states in the first four factors, and Massachusetts was ranked within
the top 15 states. In addition, we selected states that had a variety
of affected industries.
Within each of the 4 states, we then judgmentally selected one or two
local areas for additional site visits. We considered factors such as:
* the number of TAA certifications in the local area in fiscal years
2005 and 2006,
* the size of the layoffs that were TAA certified,
* the industries in which TAA petitions were certified, and:
* geographic proximity.
We selected local areas that either had a large number of TAA
certifications or dealt with one or more large layoffs (an estimate of
300 or more people affected). We also chose local areas to provide a
diverse set of industries. Finally, we considered geographic proximity
of the local areas to the state capital and to each other, in order to
minimize travel costs and time.
Table 5: Locations Selected for Site Visits:
Location: North Carolina;
Fiscal years 2005-2006 certifications: 359;
Large layoff: [Empty];
Affected industry: [Empty].
Location: Wilson;
Fiscal years 2005-2006 certifications: 4;
Large layoff: Yes;
Affected industry: Tobacco processing, men's clothing.
Location: California;
Fiscal years 2005-2006 certifications: 229;
Large layoff: [Empty];
Affected industry: [Empty].
Location: San Francisco;
Fiscal years 2005-2006 certifications: 24;
Large layoff: No;
Affected industry: Apparel, textile mills.
Location: San Jose/Campbell;
Fiscal years 2005-2006 certifications: 4;
Large layoff: Yes;
Affected industry: Industrial machinery and computer equipment.
Location: Santa Rosa;
Fiscal years 2005-2006 certifications: 5;
Large layoff: Yes;
Affected industry: Measuring, analyzing, and controlling instruments.
Location: Michigan;
Fiscal years 2005-2006 certifications: 148;
Large layoff: [Empty];
Affected industry: [Empty].
Location: Lansing;
Fiscal years 2005-2006 certifications: 7;
Large layoff: Yes;
Affected industry: Sheet metal.
Location: Sterling Heights;
Fiscal years 2005-2006 certifications: 9;
Large layoff: No;
Affected industry: Fabricated metal, machine tools, motor vehicle
parts, special dyes.
Location: Massachusetts;
Fiscal years 2005-2006 certifications: 84;
Large layoff: [Empty];
Affected industry: [Empty].
Location: Fall River;
Fiscal years 2005-2006 certifications: 18;
Large layoff: Yes;
Affected industry: Textile.
Location: Springfield;
Fiscal years 2005-2006 certifications: 2;
Large layoff: Yes;
Affected industry: Tools.
Source: GAO and Department of Labor petitions data.
[End of table]
During our site visits to the states and local areas, we interviewed
TAA officials about state policies and procedures for administering the
program. We also interviewed Workforce Investment Act (WIA) officials
and local one-stop operators to understand how services are provided to
TAA participants, including the extent to which job search assistance,
case management, and training are coordinated between the programs.
Analysis of Labor's Petition Data:
We analyzed Labor's data on petitions filed from fiscal years 2004 to
2006. We assessed the reliability of key data by interviewing Labor
officials knowledgeable about the data, observing a demonstration of
the database, reviewing prior GAO assessments of the data, and
conducting edit checks. For a small number of petitions, we identified
logical inconsistencies or missing values in the data. We brought these
issues to the attention of Labor officials and worked with them to
correct the issues before conducting our analysis. In analyzing the
number of petitions denied for TAA that were appealed to Labor, we did
not include in our analysis petitions that were appealed only for a
denial of Alternative Trade Adjustment Assistance (ATAA) wage insurance
benefits. These petitions had been certified for TAA after Labor's
initial investigation but denied for wage insurance benefits. In
analyzing data on petitions that were appealed to the Court of
International Trade, we compared Labor's data to Court documents. We
determined that Labor's data on appeals to the Court were not complete.
As a result, we supplemented Labor's data with a review of Court
documents. At the time of our review, some petitions filed during
fiscal years 2004 to 2006 may still have been undergoing an appeals
process. Our analysis of petition decisions and appeals reflect the
outcomes of petitions at the time of our review. Complete data on
reasons petitions were denied were only available for fiscal year 2006
because Labor only began to collect the data in 2005. As a result, we
reported information on reasons petitions were denied for only fiscal
year 2006.
With regard to information on the number of workers estimated to be
certified, the figures are based upon estimates of the number of
workers affected by a layoff at the time that petitions are filed with
the Department of Labor. At the time petitions are submitted, companies
may not know exactly how many workers will be affected. We use these
estimates because the Department of Labor does not collect information
on the number of workers ultimately certified. We use these data to
identify trends in the number of workers certified for TAA. They should
not be relied upon to support precise numbers on workers certified for
TAA.
Despite these limitations, we determined that Labor's petitions data
were sufficiently reliable for the purposes of this report, which was
to provide information on trends in Labor's certification of petitions.
Analysis of Labor's Quarterly Activity Reports:
To determine the extent to which participants were enrolling in
training, we reviewed Labor's quarterly reports on participants and
services. We assessed the reliability of the data by reviewed prior GAO
assessments of the data, interviewing Labor officials, and conducting
manual tests of data for outliers or obvious errors. In our discussions
with Labor officials, we determined that the data had some limitations,
specifically due to Labor's lack of formal processes to ensure that the
data were entered accurately. Despite these limitations, we determined
that the data were sufficiently reliable for the purposes of this
report, which was to provide information on aggregate trends.
Analysis of Labor's Wage Insurance Data:
To obtain information on the number of participants taking advantage of
the wage insurance benefit, we analyzed Labor's data on the benefit
from 2003 to 2006. We assessed the reliability of the data by
interviewing Labor officials, reviewing Labor documentation, and
conducting manual tests of data for outliers or obvious errors. Labor
officials informed us that the data from 2003 to 2005 were collected
through informal surveys implemented by Labor's regional offices, while
the 2006 data were collected from states through a formal reporting
system. We reviewed Labor's survey questions used to collect the data
from 2003 to 2005 and determined that the questions were asked
similarly across the time period and included data elements found in
the Alternative Trade Adjustment Assistance Activity Report (ATAAAR),
the formal reporting tool established in 2006. We also reviewed Labor's
instructions to states on implementing the ATAAAR and found no errors
in our manual data testing. We determined that the data elements
pertinent to this report were sufficiently reliable for our purposes of
reporting general national trends in participation from 2003 to 2006.
However, the data from 2003 to 2005 should not be used to report
precise numbers of wage insurance participants in that time period.
Analysis of Health Coverage Tax Credit Data:
We also analyzed IRS's data on health coverage tax credit participants
and expenditures. In our 2004 Health Coverage Tax Credit (HCTC) report,
we studied the health coverage benefit for TAA participants and Pension
Benefit Guarantee Corporation (PBGC) beneficiaries. In this report, we
examined TAA participation in the health coverage benefit only. We
assessed the reliability of the data by reviewing prior GAO assessments
of the data, interviewing IRS officials, and conducting manual tests of
the data for outliers or obvious errors. We reviewed several data
reliability documents for the 2004 report and found that there were no
significant data reliability problems with IRS's data for the prior
report. We interviewed IRS officials to obtain updated data reliability
information for the health coverage benefit data and found that there
have been no major changes in HCTC data collection or storage methods
since the 2004 report that would affect the reliability of the data. In
addition we found no outliers or obvious errors in our manual testing
of the data, and we deemed the data to be sufficiently reliable for our
reporting purposes.
Analysis of Final Decisions Rendered by U.S. Court of International
Trade, Fiscal Years 2005 and 2006:
In order to report on the decisions rendered by the Court of
International Trade on appeals from Department of Labor determinations,
we accessed, with permission, the Court of International Trade Live
Database. We searched that database for cases in the category of
"Denial of Certification for Trade Adjustment Assistance" using the
parameters of closed cases by fiscal year. We did not analyze cases
related to Trade Adjustment Assistance for Farmers and our summary of
cases does not include appeals dismissed by the Court on procedural
grounds.
[End of section]
Appendix II: Administrative Costs Related to the Health Coverage
Benefit:
Two types of program costs are associated with the Health Coverage Tax
Credit program--IRS administrative costs and Treasury outlays for the
65 percent share of taxpayers' premiums for qualified health plans.
Administrative costs for the health coverage benefit are half of
earlier levels. They have decreased from about $40 million in fiscal
year 2003 to about $20 million in fiscal year 2006, with contractor
costs declining as the HCTC Program Office moved from program setup to
maintenance of program operations. IRS costs have remained relatively
stable at approximately $3 million per fiscal year. Overall Treasury
payments for the health coverage benefit have increased from $46
million in fiscal year 2003 to $92 million in fiscal year 2005. During
this time period, advance credit payments have increased, and end-of-
year credit payments have decreased.
Table 6: HCTC Administrative Costs for Fiscal Years 2003 to 2006 and
Payments for Tax Years 2003 to 2006:
Administrative costs.
Contractor costs;
Fiscal year 2003: $36,223,608;
Fiscal year 2004: $38,575,881;
Fiscal year 2005: $22,496,239;
Fiscal year 2006: $16,851,467.
IRS costs;
Fiscal year 2003: 3,366,585;
Fiscal year 2004: 3,064,497;
Fiscal year 2005: 3,352,000;
Fiscal year 2006: 3,156,433.
Total;
Fiscal year 2003: $39,590,193;
Fiscal year 2004: $41,640,378;
Fiscal year 2005: $25,848,239;
Fiscal year 2006: $20,007,900.
Health Coverage Tax Credit payments[A].
Advance credit;
Fiscal year 2003: $10,000,000;
Fiscal year 2004: $55,000,000;
Fiscal year 2005: $71 ,000,000;
Fiscal year 2006: $80,000,000.
End-of-year credit;
Fiscal year 2003: 36,000,000;
Fiscal year 2004: 25,000,000;
Fiscal year 2005: 21,000,000;
Fiscal year 2006: Data not yet available.
Total;
Fiscal year 2003: $46,000,000;
Fiscal year 2004: $80,000,000;
Fiscal year 2005: $92,000,000;
Fiscal year 2006: Data not yet available.
Source: IRS data.
[A] IRS could not provide more precise numbers for the HCTC benefit
payments. Data include both TAA participants and those from the Pension
Benefit Guaranty Corporation because IRS cannot readily disaggregate
them.
[End of table]
[End of section]
Appendix III: Top Industries Certified during Fiscal Years 2004 to
2006:
Rank: 1;
2004: Apparel and other finished products made from fabrics and similar
materials;
2005: Textile mill products;
2006: Textile mill products.
Rank: 2;
2004: Textile mill products;
2005: Electronic and other electrical equipment and components, except
computer;
2006: Apparel and other finished products made from fabrics and similar
materials.
Rank: 3;
2004: Electronic and other electrical equipment and components, except
computer;
2005: Apparel and other finished products made from fabrics and similar
materials;
2006: Electronic and other electrical equipment and components, except
computer.
Rank: 4;
2004: Industrial and commercial machinery and computer equipment;
2005: Industrial and commercial machinery and computer equipment;
2006: Industrial and commercial machinery and computer equipment.
Rank: 5;
2004: Fabricated metal products, except machinery and transportation
equipment;
2005: Measuring, analyzing, and controlling instruments; photographic,
medical, and optical goods; watches and clocks;
2006: Transportation equipment.
Rank: 6;
2004: Lumber and wood products, except furniture;
2005: Fabricated metal products, except machinery and transportation
equipment;
2006: Fabricated metal products, except machinery and transportation
equipment.
Rank: 7;
2004: Transportation equipment;
2005: Transportation equipment;
2006: Measuring and analyzing, and controlling instruments;
photographic, medical, and optical goods; watches and clocks.
Rank: 8;
2004: Primary metal industries;
2005: Furniture and fixtures;
2006: Furniture and fixtures.
Rank: 9;
2004: Chemicals and allied products;
2005: Rubber and miscellaneous plastics products;
2006: Rubber and miscellaneous plastics products.
Rank: 10;
2004: Rubber and miscellaneous plastics products;
2005: Chemicals and allied products;
2006: Primary metal industries.
Source: GAO analysis of Department of Labor petitions data.
Note: This table presents the top industries in which petitions were
certified at the two-digit level Standard Industrial Classification
(SIC) System code.
[End of table]
[End of section]
Appendix IV: Final Decisions Rendered by the U. S. Court of
International Trade on Appealed Cases, Fiscal Years 2005 and 2006:
If Labor denies a petition, workers have 60 days after notice of that
determination to appeal to the Court of International Trade
(CIT).[Footnote 21] The Court will affirm a decision supported by
substantial evidence or, if necessary, remand the case to Labor for
further investigation. Frequently, Labor asks the Court to remand the
case so it can reconsider its decision--a voluntary remand. After a
remand, Labor either confirms or reverses its original decision and
resubmits the case to the Court. The Court, in turn, will either affirm
Labor's decision or reverse it. The Court also may dismiss worker
appeals for a variety of procedural reasons, such as lack of
jurisdiction or a worker's failure to continue pursuing the appeal.
These possible actions are listed below with the number of cases that
fall into each category. The cases listed are final decisions of the
Court that were issued in fiscal years 2005 and 2006. In many of these
cases there were multiple remands. We described only the result after
the final remand.
Table 8: Final Decisions Rendered by CIT for Fiscal Years 2005 and
2006:
Decision category: Reversed Labor's decision after remand;
2005: 0;
2006: 0.
Decision category: Affirmed Labor's original decision without remand;
2005: 0;
2006: 0.
Decision category: Affirmed Labor's reversal of original decision after
remand;
2005: 5[A];
2006: 8.
Decision category: Affirmed Labor's negative decision after remand;
2005: 1;
2006: 2.
Decision category: Dismissed;
2005: 7;
2006: 8.
Source: GAO analysis of CIT cases.
[A] Two cases were consolidated and addressed under one decision.
[End of table]
Each of the CIT case decisions is summarized below.
2005 CIT Decisions:
Affirming Labor's decision to reverse its original negative decision:
Former Employees of Ericsson, Inc. v. U.S. Sec'y of Labor (No. 02-00809
and 03-00389):
Labor determined that workers did not produce an article.
On voluntary remand, Labor determined that workers, who developed
software, also supported production at affiliated software productions
facility and as such, they did engage in activity related to production
of an article.
Former Employees of Getronics Wang Co., LLC v. U.S. Sec'y of Labor (No.
03-00529):
Labor determined that workers did not produce an article and workers
were not service providers in direct support of a Trade Adjustment
Assistance-certified firm.
On voluntary remand, Labor determined that the service workers were
eligible to apply for TAA benefits based on its finding that the
workers were colocated with a trade-certified firm, and that there was
a contract between worker's firm and trade-certified firm.
Former Employees of Cady Industries, Inc. v. U.S. Sec'y of Labor (No.
04-00244):
Labor determined that imports did not contribute importantly to worker
separations and no shift of production to foreign source occurred.
On voluntary remand, Labor determined that increased imports like or
directly competitive contributed importantly to declines in sales or
production and to total or partial separation of workers at the firm.
Former Employees of Mohican Mills, Inc. v. U.S. Sec'y of Labor (No. 04-
00255):
Labor determined that imports did not contribute importantly to
separation at subject firm and subject firm did not shift production
abroad during relevant time period.
On remand, Labor concluded that increased imports of articles like or
directly competitive with those produced by the subject firm
contributed importantly to worker separations and the sales or
production declines at the subject firm.
Former Employees of Hollister, Inc v. U.S. Sec'y of Labor (No. 04-
00262):
Labor denied a request for Alternative Trade Adjustment Assistance to
be included in a TAA petition because the application was not filed
with the TAA petition.
On voluntary remand, Labor reversed its decision based on a new
guidance letter that provided that worker groups that whose petitions
were still in process at the time of the implementation of the ATAA
program on August 6, 2003, and certified worker groups who filed
petitions that did not include an option to apply for ATAA may request
group ATAA certification after the filing of a TAA petition.
Affirming Labor's negative decision after remand:
Former Employees of Sun Apparel of Texas v. U.S. Sec'y of Labor (No. 03-
00625):
In its original determination and on remand, Labor determined that
worker layoffs were not attributable to shifts in production or
increased imports.
2006 CIT Decisions:
Affirming Labor's decision to reverse its original decision:
Former Employees of Electronic Data Systems Corp. v. U.S. Sec'y of
Labor (No. 03-00373):
Labor determined that workers producing computer programs, job control
language, database support, and documents were performing information
technology services and did not produce or support the production of an
article.
On remand, Labor revised its policy to acknowledge that "there are
tangible and intangible articles and….that the production of intangible
articles can be distinguished from the provision of services. Software
and similar intangible goods that would have been considered articles
for the purposes of the Trade Act if embodied in a physical medium will
now be considered to be articles regardless of their method of
transfer."
Former Employees of IBM Corp. Global Services v. U.S. Sec'y of Labor
(No. 03-00656):
Labor determined that workers who were software developers who wrote
and tested computer software did not produce an article.
On voluntary remand, Labor determined that in light of policy change in
Electronic Data Systems case, workers did produce an article. Labor
stated that "[t}he Department stresses that it will continue to
implement the longstanding precedent that firms must produce an article
to be certified under the Trade Act. This determination is not altered
by the fact that the provision of a service may result in the
incidental creation of an article. Because the revised policy may have
implications beyond this case of which the Department is not fully
cognizant, it will be further developed in rulemaking."
Former Employees of Computer Sciences Corp. v. U.S. Sec'y of Labor (No.
04-00149):
Labor determined that workers providing business and information
consulting, specialized application software, and technology
outsourcing support to customers in the financial services industry did
not produce an article and that there was no shift in production or
import competition.
On remand, in accordance with its new policy, Labor determined that the
firm produced an intangible article (financial software) that "would
have been considered an article if embodied in a physical medium, that
employment at the subject facility declined during the relevant period,
that CSC increased imports of software like or directly competitive
with that produced at the subject facility."
Former Employees of BMC Software, Inc. v. U.S. Sec'y of Labor (No. 04-
00229):
Labor determined that the workers, who were described by their employer
as software designers, did not produce an article.
On voluntary remand, Labor found that the workers were TAA eligible
since the firm mass-replicated software and packaged "off the shelf"
applications mass-replicated on various media.
Former Employees of Gale Group v. U.S. Sec'y of Labor (No. 04-00374):
Labor determined that workers who performed electronic indexing
services did not produce an article.
On voluntary remand, Labor found that the workers produced an
intangible product and certified them as eligible to apply for TAA
benefits.
Former Employees of Dana Undies v. U.S. Sec'y of Labor (No. 04-00615):
Labor determined that workers were not eligible for certification
because they were separated more than 1 year prior to the date of the
filing of the petition.
On voluntary remand, Labor found that through a series of
miscommunications the workers were led to believe they would not be
eligible for TAA benefits, and therefore it was appropriate to
investigate whether the workers were in fact eligible to apply for TAA
and ATAA benefits. Labor found that workers were in fact eligible to
apply for both benefits.
Former Employees of CTS Comm. Components v. U.S. Sec'y of Labor (No. 05-
00372):
Labor determined that workers were not eligible for benefits since
there was no increase in imports or shift of production.
On voluntary remand, Labor found that increased imports of like or
directly competitive products contributed importantly to the total or
partial separation of a significant number of workers.
Former Employees of Lands' End Business Outfitters v. U.S. Sec'y of
Labor (No. 09-00517):
Labor determined that workers who produced digitized embroidery designs
did not produce an article.
On voluntary remand, Labor, in accordance with its new policy, found
that the workers produced an intangible article and were therefore
eligible to apply for TAA benefits.
Decisions affirming Labor's negative decision after remand:
Former Employees of Murray Engineering v. U.S. Sec'y of Labor (No. 03-
00219):
Labor determined that no article was produced. On remand, Labor
determined that workers were not eligible for TAA benefits because, to
the extent there were imports of articles in the designs' chain of
production, such articles were not "directly competitive" with the
designs themselves. The CIT affirmed this decision on June 28, 2005,
and on November 9, 2005, also found that the workers were ineligible
for benefits because they were separated more than 1 year before the
date of the first petition.
Former Employees of Gateway Country Stores v. U.S. Sec'y of Labor (No.
04-00588):
Labor determined that workers did not produce an article.
On voluntary remand, Labor additionally determined that workers were
not eligible because they had not lost their jobs due to the company
shifting its production overseas. The CIT affirmed Labor's
determination on remand on the second basis for denial.
[End of section]
Appendix V: Occupations for Which TAA Participants Most Frequently
Received Training in Fiscal Year 2006 by State:
State: Alabama;
Most frequently trained occupation: Clerical;
Second most frequently trained occupation: Computer operator;
Third most frequently trained occupation: Medical assistant.
State: Alaska;
Most frequently trained occupation: Truck driver;
Second most frequently trained occupation: Marine trades;
Third most frequently trained occupation: Nursing.
State: Arizona;
Most frequently trained occupation: Heating, ventilation, and air
conditioning (HVAC);
Second most frequently trained occupation: Medical assistant;
Third most frequently trained occupation: Teacher's aide.
State: Arkansas;
Most frequently trained occupation: Clerical;
Second most frequently trained occupation: Nursing;
Third most frequently trained occupation: Truck driver.
State: California;
Most frequently trained occupation: Clerical;
Second most frequently trained occupation: Medical assistant;
Third most frequently trained occupation: Auto mechanic.
State: Colorado;
Most frequently trained occupation: Medical assistant;
Second most frequently trained occupation: Bookkeeping/accounting;
Third most frequently trained occupation: Truck driver.
State: Connecticut;
Most frequently trained occupation: Medical assistant;
Second most frequently trained occupation: Clerical;
Third most frequently trained occupation: Truck driver.
State: Florida;
Most frequently trained occupation: Nursing;
Second most frequently trained occupation: Truck driver;
Third most frequently trained occupation: Computer systems
administrator.
State: Georgia;
Most frequently trained occupation: Medical assistant;
Second most frequently trained occupation: Nursing;
Third most frequently trained occupation: Clerical.
State: Idaho;
Most frequently trained occupation: Nursing;
Second most frequently trained occupation: Clerical;
Third most frequently trained occupation: Truck driver.
State: Illinois;
Most frequently trained occupation: HVAC;
Second most frequently trained occupation: Nursing;
Third most frequently trained occupation: Clerical.
State: Indiana;
Most frequently trained occupation: Medical assistant;
Second most frequently trained occupation: Truck driver;
Third most frequently trained occupation: N/A.
State: Iowa;
Most frequently trained occupation: Medical assistant;
Second most frequently trained occupation: Truck driver;
Third most frequently trained occupation: HVAC.
State: Kansas;
Most frequently trained occupation: HVAC;
Second most frequently trained occupation: Nursing;
Third most frequently trained occupation: Computer repair.
State: Kentucky;
Most frequently trained occupation: Medical assistant;
Second most frequently trained occupation: Clerical;
Third most frequently trained occupation: Truck driver.
State: Louisiana;
Most frequently trained occupation: Truck driver;
Second most frequently trained occupation: Nursing;
Third most frequently trained occupation: HVAC.
State: Maine;
Most frequently trained occupation: Clerical;
Second most frequently trained occupation: Truck driver;
Third most frequently trained occupation: Nursing.
State: Maryland;
Most frequently trained occupation: Truck driver;
Second most frequently trained occupation: Clerical;
Third most frequently trained occupation: HVAC.
State: Massachusetts;
Most frequently trained occupation: Medical assistant;
Second most frequently trained occupation: HVAC;
Third most frequently trained occupation: Truck driver.
State: Michigan;
Most frequently trained occupation: Nursing;
Second most frequently trained occupation: Medical assistant;
Third most frequently trained occupation: HVAC.
State: Minnesota;
Most frequently trained occupation: Nursing;
Second most frequently trained occupation: Medical assistant;
Third most frequently trained occupation: Clerical.
State: Mississippi;
Most frequently trained occupation: Nursing;
Second most frequently trained occupation: Clerical;
Third most frequently trained occupation: Truck driver.
State: Missouri;
Most frequently trained occupation: Clerical;
Second most frequently trained occupation: HVAC;
Third most frequently trained occupation: Medical assistant.
State: Montana;
Most frequently trained occupation: N/A;
Second most frequently trained occupation: N/A;
Third most frequently trained occupation: N/A.
State: Nebraska;
Most frequently trained occupation: Medical assistant;
Second most frequently trained occupation: HVAC;
Third most frequently trained occupation: Clerical.
State: Nevada;
Most frequently trained occupation: Medical billing/ coding;
Second most frequently trained occupation: N/A;
Third most frequently trained occupation: N/A.
State: New Hampshire;
Most frequently trained occupation: Medical assistant;
Second most frequently trained occupation: Truck driver;
Third most frequently trained occupation: Nursing.
State: New Jersey;
Most frequently trained occupation: Truck driver;
Second most frequently trained occupation: Medical assistant;
Third most frequently trained occupation: HVAC.
State: New Mexico;
Most frequently trained occupation: Medical assistant;
Second most frequently trained occupation: Bookkeeping/ accounting;
Third most frequently trained occupation: Computer operator.
State: New York;
Most frequently trained occupation: Nursing;
Second most frequently trained occupation: Clerical;
Third most frequently trained occupation: Machinist.
State: North Carolina;
Most frequently trained occupation: Nursing;
Second most frequently trained occupation: Medical secretary;
Third most frequently trained occupation: Teacher's aide.
State: Ohio;
Most frequently trained occupation: Nursing;
Second most frequently trained occupation: Computer operator;
Third most frequently trained occupation: Medical assistant.
State: Oklahoma;
Most frequently trained occupation: Nursing;
Second most frequently trained occupation: HVAC;
Third most frequently trained occupation: Aircraft mechanic.
State: Oregon;
Most frequently trained occupation: Truck driver;
Second most frequently trained occupation: Clerical;
Third most frequently trained occupation: Heavy equipment operator.
State: Pennsylvania;
Most frequently trained occupation: Electrician;
Second most frequently trained occupation: Bookkeeping/accounting;
Third most frequently trained occupation: Clerical.
State: Rhode Island;
Most frequently trained occupation: Medical assistant;
Second most frequently trained occupation: Truck driver;
Third most frequently trained occupation: Computer operator.
State: South Carolina;
Most frequently trained occupation: Truck driver;
Second most frequently trained occupation: Nursing;
Third most frequently trained occupation: Computer operator.
State: South Dakota;
Most frequently trained occupation: Nursing;
Second most frequently trained occupation: Business administration;
Third most frequently trained occupation: Medical assistant.
State: Tennessee;
Most frequently trained occupation: Nursing;
Second most frequently trained occupation: Truck driver;
Third most frequently trained occupation: HVAC.
State: Texas;
Most frequently trained occupation: Medical assistant;
Second most frequently trained occupation: Nursing;
Third most frequently trained occupation: Truck driver.
State: Utah;
Most frequently trained occupation: N/A;
Second most frequently trained occupation: N/A;
Third most frequently trained occupation: N/A.
State: Vermont;
Most frequently trained occupation: N/A;
Second most frequently trained occupation: N/A;
Third most frequently trained occupation: N/A.
State: Virginia;
Most frequently trained occupation: Nursing;
Second most frequently trained occupation: Medical assistant;
Third most frequently trained occupation: Truck driver.
State: Washington;
Most frequently trained occupation: Nursing;
Second most frequently trained occupation: Bookkeeping/accounting;
Third most frequently trained occupation: Medical assistant.
State: West Virginia;
Most frequently trained occupation: HVAC;
Second most frequently trained occupation: Computer operator;
Third most frequently trained occupation: Carpenter.
State: Wisconsin;
Most frequently trained occupation: N/A;
Second most frequently trained occupation: N/A;
Third most frequently trained occupation: N/A.
Source: GAO analysis of survey responses.
Note: N/A means the state did not provide a response to this question.
[End of table]
[End of section]
Appendix VI Estimated Number of Workers Certified by State during
Fiscal Years 2004 to 2006:
State: Alaska;
2004: 533;
2005: 218;
2006: 266;
Percentage change, 2004 to 2005: -59;
Percentage change, 2005 to 2006: 22.
State: Alabama;
2004: 3,213;
2005: 2,000;
2006: 5,284;
Percentage change, 2004 to 2005: -38;
Percentage change, 2005 to 2006: 164.
State: Arizona;
2004: 1,944;
2005: 651;
2006: 943;
Percentage change, 2004 to 2005: -67;
Percentage change, 2005 to 2006: 45.
State: Arkansas;
2004: 1,438;
2005: 1,614;
2006: 2,712;
Percentage change, 2004 to 2005: 12;
Percentage change, 2005 to 2006: 68.
State: California;
2004: 7,988;
2005: 10,580;
2006: 12,099;
Percentage change, 2004 to 2005: 32;
Percentage change, 2005 to 2006: 14.
State: Colorado;
2004: 682;
2005: 1,676;
2006: 1,159;
Percentage change, 2004 to 2005: 146;
Percentage change, 2005 to 2006: -31.
State: Connecticut;
2004: 2,190;
2005: 498;
2006: 1,160;
Percentage change, 2004 to 2005: -77;
Percentage change, 2005 to 2006: 133.
State: Delaware;
2004: 402;
2005: 232;
2006: 149;
Percentage change, 2004 to 2005: -42;
Percentage change, 2005 to 2006: -36.
State: District of Columbia;
2004: 4;
2005: 0;
2006: 0;
Percentage change, 2004 to 2005: -100;
Percentage change, 2005 to 2006: 0.
State: Florida;
2004: 1,310;
2005: 1,488;
2006: 887;
Percentage change, 2004 to 2005: 14;
Percentage change, 2005 to 2006: -40.
State: Georgia;
2004: 5,539;
2005: 4,562;
2006: 6,846;
Percentage change, 2004 to 2005: -18;
Percentage change, 2005 to 2006: 50.
State: Hawaii;
2004: 1;
2005: 149;
2006: 0;
Percentage change, 2004 to 2005: 14,800;
Percentage change, 2005 to 2006: -100.
State: Iowa;
2004: 932;
2005: 1,044;
2006: 1,566;
Percentage change, 2004 to 2005: 12;
Percentage change, 2005 to 2006: 49.
State: Idaho;
2004: 309;
2005: 212;
2006: 378;
Percentage change, 2004 to 2005: -31;
Percentage change, 2005 to 2006: 78.
State: Illinois;
2004: 6,625;
2005: 7,105;
2006: 3,592;
Percentage change, 2004 to 2005: 7;
Percentage change, 2005 to 2006: -49.
State: Indiana;
2004: 4,442;
2005: 5,577;
2006: 3,255;
Percentage change, 2004 to 2005: 26;
Percentage change, 2005 to 2006: -42.
State: Kansas;
2004: 4,117;
2005: 75;
2006: 721;
Percentage change, 2004 to 2005: -98;
Percentage change, 2005 to 2006: 861.
State: Kentucky;
2004: 1,887;
2005: 2,707;
2006: 3,405;
Percentage change, 2004 to 2005: 43;
Percentage change, 2005 to 2006: 26.
State: Louisiana;
2004: 560;
2005: 379;
2006: 41;
Percentage change, 2004 to 2005: -32;
Percentage change, 2005 to 2006: -89.
State: Maine;
2004: 1,125;
2005: 492;
2006: 703;
Percentage change, 2004 to 2005: -56;
Percentage change, 2005 to 2006: 43.
State: Maryland;
2004: 644;
2005: 835;
2006: 1,298;
Percentage change, 2004 to 2005: 30;
Percentage change, 2005 to 2006: 55.
State: Massachusetts;
2004: 3,945;
2005: 2,326;
2006: 2,326;
Percentage change, 2004 to 2005: -41;
Percentage change, 2005 to 2006: 0.
State: Michigan;
2004: 7,059;
2005: 5,014;
2006: 8,562;
Percentage change, 2004 to 2005: -29;
Percentage change, 2005 to 2006: 71.
State: Minnesota;
2004: 1,554;
2005: 2,118;
2006: 634;
Percentage change, 2004 to 2005: 36;
Percentage change, 2005 to 2006: -70.
State: Mississippi;
2004: 2,308;
2005: 968;
2006: 1,937;
Percentage change, 2004 to 2005: -58;
Percentage change, 2005 to 2006: 100.
State: Missouri;
2004: 1,275;
2005: 3,230;
2006: 2,301;
Percentage change, 2004 to 2005: 153;
Percentage change, 2005 to 2006: -29.
State: Montana;
2004: 246;
2005: 282;
2006: 0;
Percentage change, 2004 to 2005: 15;
Percentage change, 2005 to 2006: -100.
State: Nebraska;
2004: 895;
2005: 280;
2006: 153;
Percentage change, 2004 to 2005: -69;
Percentage change, 2005 to 2006: -45.
State: Nevada;
2004: 165;
2005: 314;
2006: 145;
Percentage change, 2004 to 2005: 90;
Percentage change, 2005 to 2006: -54.
State: New Hampshire;
2004: 612;
2005: 941;
2006: 1,308;
Percentage change, 2004 to 2005: 54;
Percentage change, 2005 to 2006: 39.
State: New Jersey;
2004: 3,155;
2005: 2,130;
2006: 1,406;
Percentage change, 2004 to 2005: -32;
Percentage change, 2005 to 2006: -34.
State: New Mexico;
2004: 276;
2005: 73;
2006: 49;
Percentage change, 2004 to 2005: -74;
Percentage change, 2005 to 2006: -33.
State: New York;
2004: 4,804;
2005: 4,584;
2006: 3,844;
Percentage change, 2004 to 2005: -5;
Percentage change, 2005 to 2006: -16.
State: North Carolina;
2004: 16,783;
2005: 12,279;
2006: 11,143;
Percentage change, 2004 to 2005: -27;
Percentage change, 2005 to 2006:
-9.
State: North Dakota;
2004: 103;
2005: 0;
2006: 0;
Percentage change, 2004 to 2005: -100;
Percentage change, 2005 to 2006: 0.
State: Ohio;
2004: 7,574;
2005: 3,851;
2006: 6,766;
Percentage change, 2004 to 2005: -49;
Percentage change, 2005 to 2006: 76.
State: Oklahoma;
2004: 2,662;
2005: 642;
2006: 2,886;
Percentage change, 2004 to 2005: -76;
Percentage change, 2005 to 2006: 350.
State: Oregon;
2004: 4,692;
2005: 1,389;
2006: 1,177;
Percentage change, 2004 to 2005: -70;
Percentage change, 2005 to 2006: -15.
State: Pennsylvania;
2004: 7,798;
2005: 8,342;
2006: 5,422;
Percentage change, 2004 to 2005: 7;
Percentage change, 2005 to 2006: -35.
State: Puerto Rico;
2004: 1,520;
2005: 234;
2006: 0;
Percentage change, 2004 to 2005: -85;
Percentage change, 2005 to 2006: -100.
State: Rhode Island;
2004: 273;
2005: 850;
2006: 1,128;
Percentage change, 2004 to 2005: 211;
Percentage change, 2005 to 2006: 33.
State: South Carolina;
2004: 6,248;
2005: 6,534;
2006: 4,986;
Percentage change, 2004 to 2005: 5;
Percentage change, 2005 to 2006: - 24.
State: South Dakota;
2004: 1,436;
2005: 103;
2006: 276;
Percentage change, 2004 to 2005: -93;
Percentage change, 2005 to 2006: 168.
State: Tennessee;
2004: 4,614;
2005: 5,660;
2006: 5,333;
Percentage change, 2004 to 2005: 23;
Percentage change, 2005 to 2006: -6.
State: Texas;
2004: 5,813;
2005: 6,205;
2006: 2,461;
Percentage change, 2004 to 2005: 7;
Percentage change, 2005 to 2006: -60.
State: Utah;
2004: 486;
2005: 393;
2006: 145;
Percentage change, 2004 to 2005: -19;
Percentage change, 2005 to 2006: -63.
State: Vermont;
2004: 718;
2005: 392;
2006: 508;
Percentage change, 2004 to 2005: -45;
Percentage change, 2005 to 2006: 30.
State: Virginia;
2004: 4,427;
2005: 2,176;
2006: 3,917;
Percentage change, 2004 to 2005: -51;
Percentage change, 2005 to 2006: 80.
State: Washington;
2004: 7,568;
2005: 1,227;
2006: 727;
Percentage change, 2004 to 2005: -84;
Percentage change, 2005 to 2006: -41.
State: West Virginia;
2004: 629;
2005: 750;
2006: 1,349;
Percentage change, 2004 to 2005: 19;
Percentage change, 2005 to 2006: 80.
State: Wisconsin;
2004: 4,434;
2005: 2,864;
2006: 2,840;
Percentage change, 2004 to 2005: -35;
Percentage change, 2005 to 2006: -1.
State: Wyoming;
2004: 26;
2005: 0;
2006: 0;
Percentage change, 2004 to 2005: -100;
Percentage change, 2005 to 2006: 0.
Source: Department of Labor data.
Note: The data used for this table are estimates of workers certified
as eligible for TAA, based on estimates of the number of affected
workers submitted by companies at the time TAA petitions are filed with
the Department of Labor. At the time petitions are submitted, companies
may not know exactly how many workers will be affected. We use these
estimates because the Department of Labor does not collect data on the
number of workers ultimately certified.
[End of table]
[End of section]
Appendix VII: Percentage of Fiscal Year 2006 Training Funds Expended
and Obligated by State:
We surveyed the 46 states that initially received training funds in
fiscal year 2006 to determine of the total training funds they received
in fiscal year 2006, how much was actually used, that is, spent or
obligated, during the year. We received responses from all 46 states.
Table 8: Percentage of Fiscal Year 2006 Training Funds Spent or
Obligated, by State:
State: Alabama;
Initial training funds allocated: $2,642,640;
Reserve training funds requested: 0;
End-of-year distribution: $279,117;
Total training funds available: $2,921,757;
Total training funds used: $1,012,383;
Percentage used: 34.6.
State: Alaska;
Initial training funds allocated: 429,982;
Reserve training funds requested: 0;
End-of-year distribution: 45,415;
Total training funds available: 475,397;
Total training funds used: 255,996;
Percentage used: 53.8.
State: Arizona;
Initial training funds allocated: 2,440,988;
Reserve training funds requested: 0;
End-of-year distribution: 257,818;
Total training funds available: 2,698,806;
Total training funds used: 0;
Percentage used: 0.
State: Arkansas;
Initial training funds allocated: 1,750,711;
Reserve training funds requested: 0;
End-of-year distribution: 184,911;
Total training funds available: 1,935,622;
Total training funds used: 220,683;
Percentage used: 11.4.
State: California;
Initial training funds allocated: 6,642,537;
Reserve training funds requested: 0;
End-of-year distribution: 701,588;
Total training funds available: 7,344,125;
Total training funds used: 6,462,920;
Percentage used: 88.0.
State: Colorado;
Initial training funds allocated: 1,426,889;
Reserve training funds requested: 0;
End-of-year distribution: 150,709;
Total training funds available: 1,577,598;
Total training funds used: 1,031,127;
Percentage used: 65.4.
State: Connecticut;
Initial training funds allocated: 1,500,746;
Reserve training funds requested: 0;
End-of-year distribution: 158,510;
Total training funds available: 1,659,256;
Total training funds used: 1,651,057;
Percentage used: 99.5.
State: Florida;
Initial training funds allocated: 3,350,544;
Reserve training funds requested: 0;
End-of-year distribution: 353,886;
Total training funds available: 3,704,430;
Total training funds used: 0;
Percentage used: 0.
State: Georgia;
Initial training funds allocated: 1,559,104;
Reserve training funds requested: 0;
End-of-year distribution: 164,673;
Total training funds available: 1,723,777;
Total training funds used: 2,160,593;
Percentage used: 125.3.
State: Idaho;
Initial training funds allocated: 2,390,380;
Reserve training funds requested: 0;
End-of-year distribution: 252,473;
Total training funds available: 2,642,853;
Total training funds used: 0;
Percentage used: 0.
State: Illinois;
Initial training funds allocated: 4,696,350;
Reserve training funds requested: $3,000,000;
End-of-year distribution: 812,893;
Total training funds available: 8,509,243;
Total training funds used: 5,622,237;
Percentage used: 66.1.
State: Indiana;
Initial training funds allocated: 4,780,198;
Reserve training funds requested: 1,094,016;
End-of-year distribution: 620,438;
Total training funds available: 6,494,652;
Total training funds used: 6,717,473;
Percentage used: 103.4.
State: Iowa;
Initial training funds allocated: 2,835,940;
Reserve training funds requested: 1,654,272;
End-of-year distribution: 505,651;
Total training funds available: 4,995,863;
Total training funds used: 11,470,624;
Percentage used: 229.6.
State: Kansas;
Initial training funds allocated: 2,775,736;
Reserve training funds requested: 0;
End-of-year distribution: 293,175;
Total training funds available: 3,068,911;
Total training funds used: 19,854;
Percentage used: 0.6.
State: Kentucky;
Initial training funds allocated: 3,705,162;
Reserve training funds requested: 1,343,232;
End-of-year distribution: 533,214;
Total training funds available: 5,581,608;
Total training funds used: 0;
Percentage used: 0.
State: Louisiana;
Initial training funds allocated: 612,573;
Reserve training funds requested: 0;
End-of-year distribution: 64,700;
Total training funds available: 677,273;
Total training funds used: 688,205;
Percentage used: 101.6.
State: Maine;
Initial training funds allocated: 4,021,621;
Reserve training funds requested: 0;
End-of-year distribution: 424,766;
Total training funds available: 4,446,387;
Total training funds used: 4,021,621;
Percentage used: 90.4.
State: Maryland;
Initial training funds allocated: 525,184;
Reserve training funds requested: 0;
End-of-year distribution: 55,470;
Total training funds available: 580,654;
Total training funds used: 163,098;
Percentage used: 28.1.
State: Massachusetts;
Initial training funds allocated: 5,600,876;
Reserve training funds requested: 0;
End-of-year distribution: 591,568;
Total training funds available: 6,192,444;
Total training funds used: 3,582,391;
Percentage used: 57.9.
State: Michigan;
Initial training funds allocated: 5,774,380;
Reserve training funds requested: 5,477,336;
End-of-year distribution: 1,183,131;
Total training funds available: 12,434,847;
Total training funds used: 12,690,790;
Percentage used: 102.1.
State: Minnesota;
Initial training funds allocated: 4,005,739;
Reserve training funds requested: 0;
End-of-year distribution: 423,088;
Total training funds available: 4,428,827;
Total training funds used: 0;
Percentage used: 0.
State: Mississippi;
Initial training funds allocated: 2,076,016;
Reserve training funds requested: 0;
End-of-year distribution: 219,270;
Total training funds available: 2,295,286;
Total training funds used: 1,089,514;
Percentage used: 47.5.
State: Missouri;
Initial training funds allocated: 4,244,810;
Reserve training funds requested: 0;
End-of-year distribution: 448,339;
Total training funds available: 4,693,149;
Total training funds used: 4,577,433;
Percentage used: 97.5.
State: Montana;
Initial training funds allocated: 1,109,440;
Reserve training funds requested: 0;
End-of-year distribution: 117,180;
Total training funds available: 1,226,620;
Total training funds used: 0;
Percentage used: 0.
State: Nebraska;
Initial training funds allocated: 480,298;
Reserve training funds requested: 0;
End-of-year distribution: 50,729;
Total training funds available: 531,027;
Total training funds used: 323,606;
Percentage used: 60.9.
State: Nevada;
Initial training funds allocated: 253,525;
Reserve training funds requested: 0;
End-of-year distribution: 26,777;
Total training funds available: 280,302;
Total training funds used: 21,983;
Percentage used: 7.8.
State: New Hampshire;
Initial training funds allocated: 510,256;
Reserve training funds requested: 0;
End-of-year distribution: 53,893;
Total training funds available: 564,149;
Total training funds used: 478,217;
Percentage used: 84.8.
State: New Jersey;
Initial training funds allocated: 1,698,502;
Reserve training funds requested: 0;
End-of-year distribution: 179,397;
Total training funds available: 1,877,899;
Total training funds used: 1,328,090;
Percentage used: 70.7.
State: New Mexico;
Initial training funds allocated: 377,871;
Reserve training funds requested: 124,740;
End-of-year distribution: 53,086;
Total training funds available: 555,697;
Total training funds used: 666;
Percentage used: 0.1.
State: New York;
Initial training funds allocated: 2,642,798;
Reserve training funds requested: 0;
End-of-year distribution: 279,134;
Total training funds available: 2,921,932;
Total training funds used: 0;
Percentage used: 0.
State: North Carolina;
Initial training funds allocated: 9,918,421;
Reserve training funds requested: 4,599,165;
End-of-year distribution: 1,533,355;
Total training funds available: 16,050,941;
Total training funds used: 16,300,163;
Percentage used: 101.6.
State: Ohio;
Initial training funds allocated: 4,579,676;
Reserve training funds requested: 0;
End-of-year distribution: 483,708;
Total training funds available: 5,063,384;
Total training funds used: 5,589,645;
Percentage used: 110.4.
State: Oklahoma;
Initial training funds allocated: 1,523,960;
Reserve training funds requested: 0;
End-of-year distribution: 160,961;
Total training funds available: 1,684,921;
Total training funds used: 0;
Percentage used: 0.
State: Oregon;
Initial training funds allocated: 5,242,514;
Reserve training funds requested: 0;
End-of-year distribution: 553,717;
Total training funds available: 5,796,231;
Total training funds used: 4,425,853;
Percentage used: 76.4.
State: Pennsylvania;
Initial training funds allocated: 14,907,751;
Reserve training funds requested: 0;
End-of-year distribution: 1,574,565;
Total training funds available: 16,482,316;
Total training funds used: 14,309,068;
Percentage used: 86.8.
State: Rhode Island;
Initial training funds allocated: 734,856;
Reserve training funds requested: 886,380;
End-of-year distribution: 171,236;
Total training funds available: 1,792,472;
Total training funds used: 1,609,649;
Percentage used: 89.8.
State: South Carolina;
Initial training funds allocated: 4,366,585;
Reserve training funds requested: 0;
End-of-year distribution: 461,201;
Total training funds available: 4,827,786;
Total training funds used: 0;
Percentage used: 0.
State: South Dakota;
Initial training funds allocated: 371,610;
Reserve training funds requested: 376,512;
End-of-year distribution: 79,017;
Total training funds available: 827,139;
Total training funds used: 697,419;
Percentage used: 84.3.
State: Tennessee;
Initial training funds allocated: 2,681,734;
Reserve training funds requested: 0;
End-of-year distribution: 283,246;
Total training funds available: 2,964,980;
Total training funds used: 2,663,620;
Percentage used: 89.8.
State: Texas;
Initial training funds allocated: 11,149,519;
Reserve training funds requested: 0;
End-of-year distribution: 1,177,618;
Total training funds available: 12,327,137;
Total training funds used: 2,541,173;
Percentage used: 20.6.
State: Utah;
Initial training funds allocated: 1,814,367;
Reserve training funds requested: 0;
End-of-year distribution: 191,634;
Total training funds available: 2,006,001;
Total training funds used: 0;
Percentage used: 0.
State: Vermont;
Initial training funds allocated: 296,965;
Reserve training funds requested: 500,000;
End-of-year distribution: 84,176;
Total training funds available: 881,141;
Total training funds used: 372,614;
Percentage used: 42.3.
State: Virginia;
Initial training funds allocated: 5,712,451;
Reserve training funds requested: 0;
End-of-year distribution: 603,352;
Total training funds available: 6,315,803;
Total training funds used: 2,533,930;
Percentage used: 40.1.
State: Washington;
Initial training funds allocated: 14,357,300;
Reserve training funds requested: 0;
End-of-year distribution: 1,516,426;
Total training funds available: 15,873,726;
Total training funds used: 0;
Percentage used: 0.
State: West Virginia;
Initial training funds allocated: 1,038,332;
Reserve training funds requested: 3,236,579;
End-of-year distribution: 451,518;
Total training funds available: 4,726,429;
Total training funds used: 3,144,751;
Percentage used: 66.5.
State: Wisconsin;
Initial training funds allocated: 9,442,163;
Reserve training funds requested: 0;
End-of-year distribution: 997,286;
Total training funds available: 10,439,449;
Total training funds used: 9,346,418;
Percentage used: 89.5.
Total: 46 states;
Initial training funds allocated: $165,000,000;
Reserve training funds requested: $22,292,232;
End-of- year distribution: $19,808,015;
Total training funds available: $207,100,247[A];
Total training funds used: $129,124,863;
Percentage used: 62.3.
Source: Department of Labor and GAO analysis of survey responses.
[A] In fiscal year 2006, Labor distributed all $220,000,000 in training
funds. The $207,100,247 identified in table 8 represents the amount of
training funds provided to the 46 states that received initial training
allocations in fiscal year 2006. During that year, Labor also
distributed reserve training funds to Delaware, Puerto Rico, and
Wyoming. In addition, in fiscal year 2006, Labor provided a special
award of $250,000 to each state and Puerto Rico--a total of
$12,750,000--to upgrade management information systems.
[End of table]
[End of section]
Appendix VIII: Listing of Initial Allocations of Training Funds by
State for Fiscal Years 2004 to 2007:
State: Alabama;
Initial allocation of training funds for fiscal years: 2004:
$2,045,935;
Initial allocation of training funds for fiscal years: 2005:
$2,468,374;
Initial allocation of training funds for fiscal years: 2006:
$2,642,640;
Initial allocation of training funds for fiscal years: 2007:
$2,709,283.
State: Alaska;
Initial allocation of training funds for fiscal years: 2004: 468,904;
Initial allocation of training funds for fiscal years: 2005: 398,625;
Initial allocation of training funds for fiscal years: 2006: 429,982;
Initial allocation of training funds for fiscal years: 2007: 441,342.
State: Arizona;
Initial allocation of training funds for fiscal years: 2004: 2,774,159;
Initial allocation of training funds for fiscal years: 2005: 2,358,372;
Initial allocation of training funds for fiscal years: 2006: 2,440,988;
Initial allocation of training funds for fiscal years: 2007: 2,074,840.
State: Arkansas;
Initial allocation of training funds for fiscal years: 2004: 1,935,785;
Initial allocation of training funds for fiscal years: 2005: 2,059,660;
Initial allocation of training funds for fiscal years: 2006: 1,750,711;
Initial allocation of training funds for fiscal years: 2007: 1,867,055.
State: California;
Initial allocation of training funds for fiscal years: 2004: 5,936,450;
Initial allocation of training funds for fiscal years: 2005: 6,180,645;
Initial allocation of training funds for fiscal years: 2006: 6,642,537;
Initial allocation of training funds for fiscal years: 2007: 7,376,829.
State: Colorado;
Initial allocation of training funds for fiscal years: 2004: 1,616,942;
Initial allocation of training funds for fiscal years: 2005: 1,678,693;
Initial allocation of training funds for fiscal years: 2006: 1,426,889;
Initial allocation of training funds for fiscal years: 2007: 1,212,856.
State: Connecticut;
Initial allocation of training funds for fiscal years: 2004: 2,076,861;
Initial allocation of training funds for fiscal years: 2005: 1,765,584;
Initial allocation of training funds for fiscal years: 2006: 1,500,746;
Initial allocation of training funds for fiscal years: 2007: 1,566,539.
State: Delaware;
Initial allocation of training funds for fiscal years: 2004: 0;
Initial allocation of training funds for fiscal years: 2005: 0;
Initial allocation of training funds for fiscal years: 2006: 0;
Initial allocation of training funds for fiscal years: 2007: 0.
State: Florida;
Initial allocation of training funds for fiscal years: 2004: 3,767,640;
Initial allocation of training funds for fiscal years: 2005: 3,941,816;
Initial allocation of training funds for fiscal years: 2006: 3,350,544;
Initial allocation of training funds for fiscal years: 2007: 2,847,962.
State: Georgia;
Initial allocation of training funds for fiscal years: 2004: 0;
Initial allocation of training funds for fiscal years: 2005: 854,284;
Initial allocation of training funds for fiscal years: 2006: 1,559,104;
Initial allocation of training funds for fiscal years: 2007: 2,100,287.
State: Hawaii;
Initial allocation of training funds for fiscal years: 2004: 0;
Initial allocation of training funds for fiscal years: 2005: 0;
Initial allocation of training funds for fiscal years: 2006: 0;
Initial allocation of training funds for fiscal years: 2007: 0.
State: Idaho;
Initial allocation of training funds for fiscal years: 2004: 2,743,956;
Initial allocation of training funds for fiscal years: 2005: 2,332,696;
Initial allocation of training funds for fiscal years: 2006: 2,390,380;
Initial allocation of training funds for fiscal years: 2007: 2,031,823.
State: Illinois;
Initial allocation of training funds for fiscal years: 2004: 5,051,333;
Initial allocation of training funds for fiscal years: 2005: 4,294,247;
Initial allocation of training funds for fiscal years: 2006: 4,696,350;
Initial allocation of training funds for fiscal years: 2007: 5,339,750.
State: Indiana;
Initial allocation of training funds for fiscal years: 2004: 4,205,667;
Initial allocation of training funds for fiscal years: 2005: 4,432,026;
Initial allocation of training funds for fiscal years: 2006: 4,780,198;
Initial allocation of training funds for fiscal years: 2007: 5,341,113.
State: Iowa;
Initial allocation of training funds for fiscal years: 2004: 3,924,616;
Initial allocation of training funds for fiscal years: 2005: 3,336,400;
Initial allocation of training funds for fiscal years: 2006: 2,835,940;
Initial allocation of training funds for fiscal years: 2007: 2,410,549.
State: Kansas;
Initial allocation of training funds for fiscal years: 2004: 3,841,300;
Initial allocation of training funds for fiscal years: 2005: 3,265,572;
Initial allocation of training funds for fiscal years: 2006: 2,775,736;
Initial allocation of training funds for fiscal years: 2007: 2,359,376.
State: Kentucky;
Initial allocation of training funds for fiscal years: 2004: 2,091,823;
Initial allocation of training funds for fiscal years: 2005: 2,998,984;
Initial allocation of training funds for fiscal years: 2006: 3,705,162;
Initial allocation of training funds for fiscal years: 2007: 3,830,061.
State: Louisiana;
Initial allocation of training funds for fiscal years: 2004: 532,421;
Initial allocation of training funds for fiscal years: 2005: 594,658;
Initial allocation of training funds for fiscal years: 2006: 612,573;
Initial allocation of training funds for fiscal years: 2007: 520,687.
State: Maine;
Initial allocation of training funds for fiscal years: 2004: 3,136,687;
Initial allocation of training funds for fiscal years: 2005: 3,674,863;
Initial allocation of training funds for fiscal years: 2006: 4,021,621;
Initial allocation of training funds for fiscal years: 2007: 4,258,591.
State: Maryland;
Initial allocation of training funds for fiscal years: 2004: 450,590;
Initial allocation of training funds for fiscal years: 2005: 482,983;
Initial allocation of training funds for fiscal years: 2006: 525,184;
Initial allocation of training funds for fiscal years: 2007: 630,432.
State: Massachusetts;
Initial allocation of training funds for fiscal years: 2004: 5,185,023;
Initial allocation of training funds for fiscal years: 2005: 5,473,152;
Initial allocation of training funds for fiscal years: 2006: 5,600,876;
Initial allocation of training funds for fiscal years: 2007: 4,760,745.
State: Michigan;
Initial allocation of training funds for fiscal years: 2004: 5,260,956;
Initial allocation of training funds for fiscal years: 2005: 5,559,171;
Initial allocation of training funds for fiscal years: 2006: 5,774,380;
Initial allocation of training funds for fiscal years: 2007: 6,144,974.
State: Minnesota;
Initial allocation of training funds for fiscal years: 2004: 4,498,321;
Initial allocation of training funds for fiscal years: 2005: 3,824,119;
Initial allocation of training funds for fiscal years: 2006: 4,005,739;
Initial allocation of training funds for fiscal years: 2007: 3,404,879.
State: Mississippi;
Initial allocation of training funds for fiscal years: 2004: 1,680,425;
Initial allocation of training funds for fiscal years: 2005: 1,909,216;
Initial allocation of training funds for fiscal years: 2006: 2,076,016;
Initial allocation of training funds for fiscal years: 2007: 1,764,613.
State: Missouri;
Initial allocation of training funds for fiscal years: 2004: 4,799,580;
Initial allocation of training funds for fiscal years: 2005: 4,993,894;
Initial allocation of training funds for fiscal years: 2006: 4,244,810;
Initial allocation of training funds for fiscal years: 2007: 3,608,088.
State: Montana;
Initial allocation of training funds for fiscal years: 2004: 972,880;
Initial allocation of training funds for fiscal years: 2005: 1,054,844;
Initial allocation of training funds for fiscal years: 2006: 1,109,440;
Initial allocation of training funds for fiscal years: 2007: 943,024.
State: Nebraska;
Initial allocation of training funds for fiscal years: 2004: 383,862;
Initial allocation of training funds for fiscal years: 2005: 469,538;
Initial allocation of training funds for fiscal years: 2006: 480,298;
Initial allocation of training funds for fiscal years: 2007: 494,212.
State: Nevada;
Initial allocation of training funds for fiscal years: 2004: 288,723;
Initial allocation of training funds for fiscal years: 2005: 298,265;
Initial allocation of training funds for fiscal years: 2006: 253,525;
Initial allocation of training funds for fiscal years: 2007: 215,496.
State: New Hampshire;
Initial allocation of training funds for fiscal years: 2004: 576,278;
Initial allocation of training funds for fiscal years: 2005: 600,301;
Initial allocation of training funds for fiscal years: 2006: 510,256;
Initial allocation of training funds for fiscal years: 2007: 433,717.
State: New Jersey;
Initial allocation of training funds for fiscal years: 2004: 1,214,878;
Initial allocation of training funds for fiscal years: 2005: 1,545,011;
Initial allocation of training funds for fiscal years: 2006: 1,698,502;
Initial allocation of training funds for fiscal years: 2007: 1,904,545.
State: New Mexico;
Initial allocation of training funds for fiscal years: 2004: 522,930;
Initial allocation of training funds for fiscal years: 2005: 444,554;
Initial allocation of training funds for fiscal years: 2006: 377,871;
Initial allocation of training funds for fiscal years: 2007: 396,303.
State: New York;
Initial allocation of training funds for fiscal years: 2004: 2,396,232;
Initial allocation of training funds for fiscal years: 2005: 2,496,152;
Initial allocation of training funds for fiscal years: 2006: 2,642,798;
Initial allocation of training funds for fiscal years: 2007: 2,850,870.
State: North Carolina;
Initial allocation of training funds for fiscal years: 2004: 6,301,065;
Initial allocation of training funds for fiscal years: 2005: 8,174,834;
Initial allocation of training funds for fiscal years: 2006: 9,918,421;
Initial allocation of training funds for fiscal years: 2007:
12,237,219.
State: North Dakota;
Initial allocation of training funds for fiscal years: 2004: 0;
Initial allocation of training funds for fiscal years: 2005: 0;
Initial allocation of training funds for fiscal years: 2006: 0;
Initial allocation of training funds for fiscal years: 2007: 0.
State: Ohio;
Initial allocation of training funds for fiscal years: 2004: 4,971,827;
Initial allocation of training funds for fiscal years: 2005: 4,226,657;
Initial allocation of training funds for fiscal years: 2006: 4,579,676;
Initial allocation of training funds for fiscal years: 2007: 5,012,856.
State: Oklahoma;
Initial allocation of training funds for fiscal years: 2004: 1,694,508;
Initial allocation of training funds for fiscal years: 2005: 1,440,538;
Initial allocation of training funds for fiscal years: 2006: 1,523,960;
Initial allocation of training funds for fiscal years: 2007: 1,577,252.
State: Oregon;
Initial allocation of training funds for fiscal years: 2004: 4,560,530;
Initial allocation of training funds for fiscal years: 2005: 5,116,592;
Initial allocation of training funds for fiscal years: 2006: 5,242,514;
Initial allocation of training funds for fiscal years: 2007: 5,424,650.
State: Pennsylvania;
Initial allocation of training funds for fiscal years: 2004:
20,630,621;
Initial allocation of training funds for fiscal years: 2005:
17,538,533;
Initial allocation of training funds for fiscal years: 2006:
14,907,751;
Initial allocation of training funds for fiscal years: 2007:
15,352,937.
State: Rhode Island;
Initial allocation of training funds for fiscal years: 2004: 664,718;
Initial allocation of training funds for fiscal years: 2005: 690,084;
Initial allocation of training funds for fiscal years: 2006: 734,856;
Initial allocation of training funds for fiscal years: 2007: 812,935.
State: South Carolina;
Initial allocation of training funds for fiscal years: 2004: 7,972,769;
Initial allocation of training funds for fiscal years: 2005: 5,137,159;
Initial allocation of training funds for fiscal years: 2006: 4,366,585;
Initial allocation of training funds for fiscal years: 2007: 4,499,254.
State: South Dakota;
Initial allocation of training funds for fiscal years: 2004: 401,294;
Initial allocation of training funds for fiscal years: 2005: 341,148;
Initial allocation of training funds for fiscal years: 2006: 371,610;
Initial allocation of training funds for fiscal years: 2007: 424,546.
State: Tennessee;
Initial allocation of training funds for fiscal years: 2004: 2,043,052;
Initial allocation of training funds for fiscal years: 2005: 2,464,473;
Initial allocation of training funds for fiscal years: 2006: 2,681,734;
Initial allocation of training funds for fiscal years: 2007: 2,813,324.
State: Texas;
Initial allocation of training funds for fiscal years: 2004: 9,748,941;
Initial allocation of training funds for fiscal years: 2005:
10,638,355;
Initial allocation of training funds for fiscal years: 2006:
11,149,519;
Initial allocation of training funds for fiscal years: 2007:
11,460,562.
State: Utah;
Initial allocation of training funds for fiscal years: 2004: 1,988,268;
Initial allocation of training funds for fiscal years: 2005: 2,134,549;
Initial allocation of training funds for fiscal years: 2006: 1,814,367;
Initial allocation of training funds for fiscal years: 2007: 1,542,212.
State: Vermont;
Initial allocation of training funds for fiscal years: 2004: 244,190;
Initial allocation of training funds for fiscal years: 2005: 287,696;
Initial allocation of training funds for fiscal years: 2006: 296,965;
Initial allocation of training funds for fiscal years: 2007: 252,420.
State: Virginia;
Initial allocation of training funds for fiscal years: 2004: 4,655,428;
Initial allocation of training funds for fiscal years: 2005: 5,222,843;
Initial allocation of training funds for fiscal years: 2006: 5,712,451;
Initial allocation of training funds for fiscal years: 2007: 6,093,702.
State: Washington;
Initial allocation of training funds for fiscal years: 2004:
13,402,389;
Initial allocation of training funds for fiscal years: 2005:
13,920,774;
Initial allocation of training funds for fiscal years: 2006:
14,357,300;
Initial allocation of training funds for fiscal years: 2007:
12,203,705.
State: West Virginia;
Initial allocation of training funds for fiscal years: 2004: 576,219;
Initial allocation of training funds for fiscal years: 2005: 770,639;
Initial allocation of training funds for fiscal years: 2006: 1,038,332;
Initial allocation of training funds for fiscal years: 2007: 1,425,746.
State: Wisconsin;
Initial allocation of training funds for fiscal years: 2004:
10,763,024;
Initial allocation of training funds for fiscal years: 2005:
11,108,427;
Initial allocation of training funds for fiscal years: 2006: 9,442,163;
Initial allocation of training funds for fiscal years: 2007: 8,025,839.
State: Wyoming;
Initial allocation of training funds for fiscal years: 2004: 0;
Initial allocation of training funds for fiscal years: 2005: 0;
Initial allocation of training funds for fiscal years: 2006: 0;
Initial allocation of training funds for fiscal years: 2007: 0.
State: Total: 50 states;
Initial allocation of training funds for fiscal years: 2004:
$165,000,000;
Initial allocation of training funds for fiscal years: 2005:
$165,000,000;
Initial allocation of training funds for fiscal years: 2006:
$165,000,000;
Initial allocation of training funds for fiscal years: 2007:
$165,000,000.
Source: Department of Labor.
[End of table]
[End of section]
Appendix IX: Wage Insurance Enrollments by State since 2003:
State: Alabama;
2003-2004: 36;
2005: 37;
2006: 120.
State: Alaska;
2003-2004: 2;
2005: 0;
2006: 0.
State: Arizona;
2003-2004: 9;
2005: 35;
2006: 7.
State: Arkansas;
2003-2004: 10;
2005: 47;
2006: 16.
State: California;
2003-2004: 0;
2005: 4;
2006: 24.
State: Colorado;
2003-2004: 5;
2005: 10;
2006: 37.
State: Connecticut;
2003-2004: 23;
2005: 18;
2006: 19.
State: Delaware;
2003-2004: 4;
2005: N/A;
2006: 2.
State: District of Columbia;
2003-2004: 0;
2005: 0;
2006: 0.
State: Florida;
2003-2004: 2;
2005: 6;
2006: 12.
State: Georgia;
2003-2004: 44;
2005: 97;
2006: 171.
State: Hawaii;
2003-2004: 0;
2005: 0;
2006: 0.
State: Idaho;
2003-2004: 11;
2005: 17;
2006: 24.
State: Illinois;
2003-2004: 19;
2005: 92;
2006: 64.
State: Indiana;
2003-2004: 155;
2005: 140;
2006: 101.
State: Iowa;
2003-2004: 10;
2005: 6;
2006: 46.
State: Kansas;
2003-2004: 0;
2005: 10;
2006: 13.
State: Kentucky;
2003-2004: 0;
2005: 61;
2006: 74.
State: Louisiana;
2003-2004: 6;
2005: 3;
2006: 0.
State: Maine;
2003-2004: 29;
2005: 37;
2006: 107.
State: Maryland;
2003-2004: 0;
2005: N/A;
2006: 36.
State: Massachusetts;
2003-2004: 2;
2005: 38;
2006: 25.
State: Michigan;
2003-2004: 0;
2005: 100;
2006: 180.
State: Minnesota;
2003-2004: 11;
2005: 15;
2006: 36.
State: Mississippi;
2003-2004: 78;
2005: 54;
2006: 25.
State: Missouri;
2003-2004: 20;
2005: 32;
2006: 76.
State: Montana;
2003-2004: 0;
2005: 0;
2006: 2.
State: Nebraska;
2003-2004: 0;
2005: 2;
2006: 11.
State: Nevada;
2003-2004: 0;
2005: 1;
2006: 2.
State: New Hampshire;
2003-2004: 2;
2005: 11;
2006: 85.
State: New Jersey;
2003-2004: 5;
2005: 11;
2006: 33.
State: New Mexico;
2003-2004: 0;
2005: 0;
2006: 0.
State: New York;
2003-2004: 33;
2005: 205;
2006: 163.
State: North Carolina;
2003-2004: 175;
2005: 270;
2006: 365.
State: North Dakota;
2003-2004: 0;
2005: 0;
2006: 10.
State: Ohio;
2003-2004: 67;
2005: 134;
2006: 193.
State: Oklahoma;
2003-2004: 40;
2005: 43;
2006: 21.
State: Oregon;
2003-2004: 25;
2005: 50;
2006: 14.
State: Pennsylvania;
2003-2004: 125;
2005: 221;
2006: 153.
State: Puerto Rico;
2003-2004: 0;
2005: 0;
2006: 0.
State: Rhode Island;
2003-2004: 9;
2005: 9;
2006: 20.
State: South Carolina;
2003-2004: 47;
2005: 146;
2006: 178.
State: South Dakota;
2003-2004: 88;
2005: N/A;
2006: 21.
State: Tennessee;
2003-2004: 86;
2005: 125;
2006: 184.
State: Texas;
2003-2004: 35;
2005: 36;
2006: 105.
State: Utah;
2003-2004: 0;
2005: 7;
2006: 18.
State: Vermont;
2003-2004: 6;
2005: 8;
2006: 10.
State: Virginia;
2003-2004: 110;
2005: 85;
2006: 188.
State: Washington;
2003-2004: 17;
2005: 15;
2006: 15.
State: West Virginia;
2003-2004: 10;
2005: 32;
2006: 42.
State: Wisconsin;
2003-2004: 47;
2005: 79;
2006: 123.
State: Wyoming;
2003-2004: 0;
2005: 0;
2006: 0.
State: National totals;
2003-2004: 1,403;
2005: 2,349;
2006: 3,171.
Source: Department of Labor.
Note: Enrollment data for 2003-2004 are for August 6, 2003, to December
31, 2004. Enrollment data for 2005 are for January 1 to December 31,
2005. Enrollment data for 2006 are for January 1 to December 31, 2006.
N/A indicates data not available.
[End of table]
[End of section]
Appendix X: Cumulative TAA Participation by State in Advance Health
Coverage Tax Credit, through September 30, 2006:
State: Alaska;
TAA participants: *;
State: Montana;
TAA participants: 52.
State: Alabama;
TAA participants: 492;
State: North Carolina;
TAA participants: 5,113.
State: Arkansas;
TAA participants: 165;
State: North Dakota;
TAA participants: *.
State: Arizona;
TAA participants: 85;
State: Nebraska;
TAA participants: 33.
State: California;
TAA participants: 383;
State: New Hampshire;
TAA participants: 98.
State: Colorado;
TAA participants: 172;
State: New Jersey;
TAA participants: 293.
State: Connecticut;
TAA participants: 249;
State: New Mexico;
TAA participants: *.
State: District of Columbia;
TAA participants: *;
State: Nevada;
TAA participants: *.
State: Delaware;
TAA participants: 11;
State: New York;
TAA participants: 608.
State: Florida;
TAA participants: 121;
State: Ohio;
TAA participants: 782.
State: Georgia;
TAA participants: 353;
State: Oklahoma;
TAA participants: 120.
State: Hawaii;
TAA participants: *;
State: Oregon;
TAA participants: 279.
State: Iowa;
TAA participants: 179;
State: Pennsylvania;
TAA participants: 1,714.
State: Idaho;
TAA participants: 119;
State: Rhode Island;
TAA participants: 197.
State: Illinois;
TAA participants: 624;
State: South Carolina;
TAA participants: 694.
State: Indiana;
TAA participants: 567;
State: South Dakota;
TAA participants: 10.
State: Kansas;
TAA participants: 133;
State: Tennessee;
TAA participants: 1,512.
State: Kentucky;
TAA participants: 758;
State: Texas;
TAA participants: 289.
State: Louisiana;
TAA participants: *;
State: Utah;
TAA participants: 55.
State: Massachusetts;
TAA participants: 104;
State: Virginia;
TAA participants: 1,915.
State: Maryland;
TAA participants: 101;
State: Vermont;
TAA participants: 16.
State: Maine;
TAA participants: 368;
State: Washington;
TAA participants: 559.
State: Missouri;
TAA participants: 932;
State: Wisconsin;
TAA participants: 709.
State: Minnesota;
TAA participants: 223;
State: West Virginia;
TAA participants: 239.
State: Missouri;
TAA participants: 245;
State: Wyoming;
TAA participants: *.
State: Mississippi;
TAA participants: 168.
State: Total;
TAA participants: 21,880.
Source: IRS data.
Note: Cumulative participation is the total number of participants who
have completed an advance health coverage benefit registration at some
time in the program. These numbers do not include qualified family
members. *denotes a value from a sample of less than 10. These data
cannot be released due to IRS disclosure and privacy guidelines.
[End of table]
[End of section]
Appendix XI: Comments from the Department of Labor:
U.S. Department of Labor:
Assistant Secretary for Employment and Training:
Washington, D.C. 20210:
May 1 8 2007:
Mr. Sigurd R. Nilsen:
Director:
Education, Workforce and Income Security Issues:
U.S. Government Accountability Office:
441 G Street, NW:
Washington, DC 20548:
Dear Mr. Nilsen:
This is the Department of Labor's response to the Government
Accountability Office (GAO) Draft Report No. 07-701 entitled, "Trade
Adjustment Assistance - Changes to Funding Allocation and Eligibility
Requirements Could Enhance States' Ability to Provide Benefits and
Services." We appreciate the opportunity to comment on the draft.
We note that the report contains a number of recommendations for
statutory changes to the Trade Adjustment Assistance (TAA) program. The
Department has not included comments with respect to those
recommendations. We expect to address proposed statutory changes in the
context of legislation that is considered by the Congress to
reauthorize the TAA program later this year.
With respect to administrative issues raised in the report, we have the
following comments.
The information you provide indicates that of the 2,599 petitions that
were initially denied in fiscal years 2004-2006, only 16 of the denials
were ultimately reversed by the Court of International Trade. We are
especially pleased that this is included in your report because it
appears that our efforts to reform the investigation process to meet
statutory timelines have not had a negative impact on the quality of
the decisions we are making.
We are also pleased to see that this review has addressed some of the
issues surrounding the TAA allocation formula adopted by the Department
in fiscal year 2004 to more equitably fund state TAA needs. We would
note prior to our establishment of an allocation formula, there was
significant uncertainty regarding the availability of training funds
throughout the entire fiscal year.
We believe the adoption of a formula-based methodology for distributing
TAA training funds has been a success. We know that since adopting this
formula approach, no state has ended the year without access to TAA
training funds when they have been able to show that they have expended
at least 50 percent of their current year allocation or have otherwise
demonstrated need. Our policy of maintaining a 25 percent reserve has
made it possible to meet state needs for additional training funds
throughout the entire fiscal year.
At the present time, we are reviewing the formula to ensure that
current year funds are allocated efficiently to meet current year TAA
training needs. The Department has become concerned that some states
carry a significant level of funds into the new fiscal year, while
other states have expended nearly all funds allocated. The "hold
harmless" formula provision, which guarantees a state 85 percent of the
prior year's funds, may be causing this imbalance, and this report
seems to confirm the need to review that provision. In implementing the
formula, the Department believed that the hold harmless provision was
important to ensure funding stability while states were becoming
accustomed to the new methodology. Now that states have experience with
the formula and the reserve process, the Department believes it is
appropriate to consider changes to this provision.
We are also examining your suggestion that reserve funds be allocated
on a quarterly basis instead of being held for distribution upon
request. We do not agree with the suggestion that the current 15
percent allocation for administration be increased to finance the costs
of case management for trade affected workers. We believe that these
workers should receive case management, assessment, and placement
services through co-enrollment in Workforce Investment Act (WIA) core
and intensive services as dislocated workers. Funding such services
under the TAA program would be duplicative of services already
available under WIA. In support of this, we note that funds clearly
exist under WIA for this task, as evidenced by the $555 million in
unexpended WIA Dislocated Worker funds states carried in to program
year 2006.
If you would like additional information, please do not hesitate to
call me at (202) 693-2700. You may also contact Erica Cantor,
Administrator, Office of National Response, at 202-693-3500.
Sincerely,
Signed by:
Emily Stover DeRocco:
[End of section]
Appendix XII: GAO Contacts and Staff Acknowledgments:
GAO Contact:
Sigurd R. Nilsen, Director (202)-512-7215, nilsens@gao.gov:
Acknowledgments:
Dianne Blank, Assistant Director:
Wayne Sylvia, Analyst-in-Charge:
Yunsian Tai, Guisseli Reyes-Turnell, and Suneeti Shah made significant
contributions to this report in all aspects of our work. In addition,
Stuart Kaufman assisted in the design of the national survey; Joanna
Chan analyzed survey responses; David Dornisch assisted in assessing
data reliability; Jessica Botsford provided legal support; Karen Burke
provided graphic design assistance; Rachael Valliere provided writing
assistance; and Sara Schibanoff verified our findings.
[End of section]
Related GAO Products:
Trade Adjustment Assistance: New Program for Farmers Provides Some
Assistance, but Has Had Limited Participation and Low Program
Expenditures. GAO-07-201. Washington, D.C.: December 18, 2006.
National Emergency Grants: Labor Has Improved Its Grant Award
Timeliness and Data Collection, but Further Steps Can Improve Process.
GAO-06-870. Washington, D.C.: September 5, 2006.
Trade Adjustment Assistance: Labor Should Take Action to Ensure
Performance Data Are Complete, Accurate, and Accessible. GAO-06-496.
Washington, D.C.: April, 25, 2006.
Trade Adjustment Assistance: Most Workers in Five Layoffs Received
Services, but Better Outreach Needed on New Benefits. GAO-06-43.
Washington, D.C.: January 31, 2006.
Workforce Investment Act: Labor and States Have Taken Actions to
Improve Data Quality, but Additional Steps Are Needed. GAO-06-82.
Washington, D.C.: November 14, 2005.
Workforce Investment Act: Substantial Funds Are Used for Training, but
Little Is Known Nationally about Training Outcomes. GAO-05-650.
Washington, D.C.: June 29, 2005.
Unemployment Insurance: Better Data Needed to Assess Reemployment
Services to Claimants. GAO-05-413. Washington, D.C.: June 24, 2005.
Workforce Investment Act: Labor Should Consider Alternative Approaches
to Implement New Performance and Reporting Requirements. GAO-05-539.
Washington, D.C.: May 27, 2005.
Health Coverage Tax Credit: Simplified and More Timely Enrollment
Process Could Increase Participation. GAO-04-1029. (Washington, D.C.:
September 30, 2004).
Trade Adjustment Assistance: Reforms Have Accelerated Training
Enrollment, but Implementation Challenges Remain. GAO-04-1012.
Washington, D.C.: September 22, 2004.
Workforce Investment Act: States and Local Areas Have Developed
Strategies to Assess Performance, but Labor Could Do More to Help. GAO-
04-657. Washington, D.C.: June 1, 2004.
National Emergency Grants: Labor Is Instituting Changes to Improve
Award Process, but Further Actions Are Required to Expedite Grant
Awards and Improve Data. GAO-04-496. Washington, D.C.: April 16, 2004.
Workforce Investment Act: Better Guidance and Revised Funding Formula
Would Enhance Dislocated Worker Program. GAO-02-274. Washington, D.C.:
February 11, 2002.
FOOTNOTES
[1] GAO, Trade Adjustment Assistance: Reforms Have Accelerated Training
Enrollment, but Implementation Challenges Remain, GAO-04-1012
(Washington, D.C.: Sept. 22, 2004), and GAO, Trade Adjustment
Assistance: Most Workers in Five Layoffs Received Services, but Better
Outreach Needed on New Benefits, GAO-06-43 (Washington, D.C.: Jan. 31,
2006).
[2] The five locations were Wilmington, Massachusetts; Hazelwood,
Missouri; Oxford, Mississippi; Lewistown, Pennsylvania; and Longview,
Washington.
[3] The four states that did not receive an initial allocation of TAA
training funds in fiscal year 2006 were Delaware, Hawaii, North Dakota,
and Wyoming.
[4] Labor defines "significant portion" as the lesser of 5 percent of
the affected workforce or 50 workers at a firm with 50 or more workers,
or at least 3 workers in a firm with less than 50 affected workers.
[5] The Trade Adjustment Assistance Reform Act of 2002 created a health
coverage tax credit for certain workers who are eligible to receive
income support benefits under the TAA program because their jobs were
lost due to foreign competition and for certain retirees whose pensions
from a former employer were terminated and are now paid by the Pension
Benefit Guaranty Corporation (PBGC).
[6] The statute provides that Labor determine that a significant number
or portion of workers have become totally or partially separated, or
are threatened to become totally or partially separated. 19 U.S.C. §
2272(a)(1).
[7] TAA training is a capped entitlement and appears in the mandatory
portion of the annual federal budget.
[8] The data used to estimate the number of workers certified as
eligible for TAA is based on estimates of the number of affected
workers submitted by companies at the time TAA petitions are filed with
the Department of Labor. At the time petitions are submitted, companies
may not know exactly how many workers will be affected.
[9] Fiscal year 2006 was the first year that complete data were
available on the reasons petitions were denied.
[10] 71 Fed. Reg. 18355 (April 11, 2006)
[11] The percentages are based on enrollments in each training category
and not individuals. Some individuals could have enrolled in more than
one activity.
[12] GAO-04-1012.
[13] Hawaii and North Dakota did not receive end-of-the year funding
because these states received no training funds at all during the year.
[14] For example, if Labor had distributed a total of $200 million in
training funds during the year and a state had received a total of $10
million (received $7 million from its initial training allocation and
had requested an additional $3 million during the year), then that
state would receive 5 percent of any reserve funds distributed at the
end of the year.
[15] This percentage is based on the total number of TAA participants
because the number of workers potentially eligible for the wage
insurance benefit is not readily available.
[16] GAO, Trade Adjustment Assistance: Most Workers in Five Layoffs
Received Services, but Better Outreach Needed on New Benefits, GAO-06-
43 (Washington, D.C.: Jan. 31, 2006).
[17] GAO, Health Coverage Tax Credit: Simplified and More Timely
Enrollment Process Could Increase Participation, GAO-04-1029
(Washington, D.C.: Sept. 30, 2004).
[18] States can apply to Labor for national emergency grants to cover
the 65 percent share of premiums during the typically 1-to 3-month gap
between applicants' enrollment and IRS's payment of the first month's
advance health benefit. As of September 2006, 18 states have received
these grants.
[19] An exception to this requirement occurs for COBRA coverage. Under
the TAA Reform Act, workers may choose COBRA coverage at the time they
first lose their employer-provided coverage, or they may elect to
purchase coverage within a 60-day period that begins the first day of
the month in which they become eligible to receive TAA benefits.
[20] GAO, Health Coverage Tax Credit: Simplified and More Timely
Enrollment Process Could Increase Participation. GAO-04-1029.
(Washington, D.C.: Sept. 30, 2004).
[21] 19 U.S.C. § 2395.
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